Hard Money Loan
Hard Money Loans are a specific type of financing in which a borrower receives funds based on the value of a specific parcel of real estate. Typically issued at much higher interest rates than conventional commercial or residential property loans, banks or other deposit institutions almost never issue Hard Money Loans.
Similar to a bridge loan, which usually has a similar criteria for lending as well as cost to the borrowers. The primary difference is that a bridge loan often refers to a commercial property or investment property that may be in transition and not yet qualifying for traditional financing.
Hard money often refers to not only an asset-based loan with a high interest rate, but can signify a distressed financial situation such as arrears on the existing mortgage or bankruptcy and foreclosure proceedings are occurring.
Most preferred type of credit
Over the years demand for hard money loans has increased steadily. It is the most preferred type of credit especially for business lending.