A Hard Money Loan is a short-term financing form where lenders focus primarily on the asset’s collateral value rather than the borrower’s credit history. Typically extended by private investors or specialized funds, these loans fill scenarios needing rapid closures or bridging solutions. Interest rates and fees run higher than conventional loans due to higher perceived risks and quick underwriting processes.

Key Points:

• Collateral-Based: The asset secures the loan, easing lender concerns over credit scores.
• Fast Funding: Minimal red tape or extended appraisals, suiting urgent deals.
• High Interest Costs: Reflects added uncertainty and lack of conventional underwriting.
• Short-Term Nature: Borrowers often refinance or repay within a few months to a couple of years.

Hard money loans empower individuals seeking immediate capital but require careful exit strategies to avoid elevated fees or possible foreclosures.