How is private (hard money) lending different from a bank loan?

We are asset-based, which means we underwrite the property, its equity, and your business plan rather than your personal income and tax returns. That lets us fund in days instead of the 30 to 60+ days a bank takes, on short interest-only terms built around a flip, refinance, or sale. You pay a higher rate than a bank in exchange for speed, flexibility, and certainty on deals a bank cannot fund in time.

How fast can you close?

Fix and flip and residential bridge loans typically close in 5 to 7 days once we have your basics. Rental (DSCR) loans usually take 2 to 3 weeks because of the appraisal and rent verification, and SBA financing runs 30 to 90 days. The biggest variable is how quickly title, insurance, and your documents come together.

Do you check credit, and is there a minimum score?

We do run credit, but on our asset-based loans it carries far less weight than at a bank, and weaker credit can often be offset with a larger down payment or lower leverage. There is no personal income test on these programs. Credit matters most on long-term rental loans, where we look for a 640 minimum and it affects your rate and leverage.

Do I need to provide income documents or tax returns?

Generally no. Our bridge, fix and flip, and construction loans qualify off the property and your equity, and our DSCR rental loans qualify off the property's rent, so we do not ask for W-2s or pay stubs. We will want to see bank statements or proof of reserves. SBA and conventional investment loans are the exceptions and are fully documented.

What do you need to give me a quote?

Just the basics of the deal: the property address or type, the purchase price or current value, your rehab budget, the loan amount, and your exit plan. We can often pre-qualify you over the phone or through a short application and issue a proof-of-funds letter before you are even under contract.

What is a point, and how do your rates compare to a bank?

A point is an upfront fee equal to 1% of the loan amount, and origination on private loans typically runs 1 to 3 points. Our rates are higher than a bank, generally in the high single digits to low teens depending on the program, because the loans are short, fast, and flexible. When you compare offers, weigh the rate and the points together as your true cost of capital.

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Strategy · 6 min read

What Kills a Loan at Underwriting

The short answer

Most loans that fall apart do so late, for a short list of repeatable reasons. What actually kills a file at underwriting, and what to fix before you apply.

Loans rarely die because the deal was bad. They die because something in the file could not be verified in time. The list is short and it repeats, which means most of it is preventable.

This is the borrower's side of the problem. The agent and wholesaler view is in why real estate deals fall through at financing.

The appraisal comes in low

The most common single cause. Leverage is a percentage of value, so a low appraisal shrinks the loan and the gap lands on you, usually days before closing.

On a rehab it is worse, because the whole model rests on ARV. An ARV built from optimistic comps is a deal that was never going to fund. Pull your own comps honestly before you offer.

Title turns up something

Unreleased liens, contractor claims, probate gaps, unpaid municipal charges. See title and insurance. Order the search early; these clear on their own schedule, not yours.

The entity does not match

The contract is in your name, the loan is to the LLC. Or the LLC is registered in one state and the property is in another, or it was formed last week with no operating agreement. All fixable, none fixable quickly. Financing a rental in an LLC and LLC vs personal name cover it.

The down payment cannot be sourced

Lenders verify where the equity came from. A large deposit that appeared three weeks ago with no trail is a problem, even when it is entirely legitimate. Season your funds, keep the paper trail, and disclose gifts or partner contributions up front rather than explaining them under time pressure.

Insurance is wrong or late

A vacant rehab on a homeowner's policy, or the lender named incorrectly. It is a one-line fix that regularly costs a closing day.

The numbers moved

Rehab scope grew, rents came in under projection, a second lien surfaced. Anything that changes leverage or coverage after approval reopens the file. On a rental, if DSCR drops below program minimum the loan is resized, and our DSCR program starts at 0.75.

The fix is front-loading

Every item above costs less to handle at week one than at week four. Have the documents ready before you apply: hard money loan documents lists them, and how fast a hard money loan can close explains what genuinely sets the pace. It is almost never the lender.

Every file is decided in underwriting. This is not a commitment to lend.

Frequently asked

What is the most common reason a loan falls through?

Why does the lender ask where my down payment came from?

How do I stop a file stalling at the end?

Rates, leverage, and timelines mentioned in this guide are typical figures, subject to underwriting and market conditions. Not a commitment to lend. Nothing here is legal, tax, or investment advice.

Related programs

Fix and Flip Rental / DSCR Bank Statement / No-Doc

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DSCR Loan vs Hard Money Loan Hard Money vs Private Money

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