Hard Money Loans for Commercial Real Estate: Fast Financing Guide
Hard money loans serve as short-term, asset-based financing similar to bridge loans but with higher interest rates (10%+) and faster closings—ideal for commercial multifamily and hospitality deals needing urgency or when borrowers have credit issues.
Who Provides Hard Money Loans?
High net worth individuals, family offices, or small capital aggregators fund these loans, bypassing banks and institutional debt funds due to their high-risk profile. No investment committees or heavy red tape means decisions hinge on the lender’s deal assessment.
Key Features and Advantages
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Lightning-fast closings: Days to weeks via minimal diligence.
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Flexible underwriting: Ignores credit blemishes; focuses on property value.
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Interest-only payments: Short-term bridge to permanent financing.
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No/low prepayment penalties: Easy exit strategy.
Loan sizing bases on property value (LTV-driven), not cash flow, with recourse varying by lender.
Costs and Drawbacks
High double-digit rates, origination/extension/payoff points make these “loans of last resort.” Used for quick acquisitions then refinanced into cheaper products like CMBS or agency debt.
| Feature | Hard Money Details |
|---|---|
| Rates | 10-18% |
| Term | Short-term (months-years) |
| Collateral | Property value primary |
| Best For | Time-sensitive deals, credit-challenged borrowers |
Contact Randy Efron at randy.efron@skylatus.com for capital strategies at Skylatus Property Capital.
