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Bridge and Hard Money Loans

When time is of the essence and you can’t wait for traditional financing, hard money or bridge loans can help you get what you need quickly. Great for short-term funding, these loans will help you strike quickly on limited-time offers.

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What are bridge and hard money loans?

Hard money financing, or “bridge” loans, get their name from the short-term nature of the loan. They help build a financial bridge from now until long-term financing is available. Most hard money loans have terms of a few months to a few years and are often replaced by long-term financing. These loans are secured by a hard asset that’s used as collateral.

For Example

If you want to buy an investment property that’s in a competitive market, a bridge loan can help you make a cash offer now. Then, when you’re approved for long-term financing, that money can be used to pay off the bridge loan. Typically, these short-term loans carry higher interest rates than their long-term counterparts.

What are bridge and hard money loans?

Hard money financing, or “bridge” loans, get their name from the short-term nature of the loan. They help build a financial bridge from now until long-term financing is available. Most hard money loans have terms of a few months to a few years and are often replaced by long-term financing. These loans are secured by a hard asset that’s used as collateral. For example If you want to buy an investment property that’s in a competitive market, a bridge loan can help you make a cash offer now. Then, when you’re approved for long-term financing, that money can be used to pay off the bridge loan. Typically, these short-term loans carry higher interest rates than their long-term counterparts.

Real Estate

A real estate hard money loan uses the value of real estate to secure the loan. A lender will finance a percentage of the property’s value and provide you with the cash you need to meet other expenses.

Equipment

Built to last is a valuable asset that can be leveraged to bring quick cash into your business. Keep your equipment in place while you use its value to cover unexpected financial needs or new projects.

Cross-Collateralizing

In the event that one asset isn’t enough to secure the loan, some lenders will accept a combination of assets. The higher the down payment, the better chance a borrower has of being approved for the loan.

Advantages to bridge or hard money loans

01

Loans are processed much more quickly than traditional bank loans.

02

Loan payments are interest-only during the term of the loan.

03

Great credit isn’t necessary to secure a hard money loan.

04

The funds from a bridge loan can be used for any purpose.

FAQ

When is a hard money loan not a good fit?
Hard or bridge money is short-term and must be repaid earlier than a traditional loan. So, if you don’t need the funds quickly and can qualify for less expensive financing, hard money or bridge loans are not for you.
How fast can I get the money?
Some lenders can offer funds in as little as 24 to 48 hours from the time of application.
What are hard money loans used for?
A hard money loan can cover real estate purchases, construction, equipment, working capital, and more.
Will a hard money loan hurt my credit?
No. Unless you default on the loan, paying off a short-term loan should actually improve your credit score.