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  • Writer's pictureCapital Bridge Partners

Why Hard Money Loans?

Updated: Nov 19, 2023


The Hard Money Solution

Friends often ask incredulously, “who would borrow from a hard money lender?”

After all, when compared to banks, hard money rates are higher, fees are greater, and loan terms are shorter.

My friends are therefore usually surprised by my answer:

Almost every real estate professional has borrowed hard money.

Our portfolio is filled with young entrepreneurs, grizzled developers, and sophisticated family office investors. It’s not because they are desperate or on the brink of bankruptcy. Professional investors use private money because of the lenders’ ability to quickly and flexibly evaluate The Deal, The Person, and The Property:

The Deal

Borrowers often come to us with the same dilemma: they are interested in a deal but need to close quickly. They found a great property, are stepping into a transaction at the last minute, are making a non-contingent offer, or are exhausted from trying to close with a bank. They have no time left on their purchase. We will close on the loan in a matter of days compared to the weeks and months it takes for a bank. Our timeline is shorter because we have less government regulation and no internal bureaucracy. If we see a deal we like, we make the decisions, and we close immediately.

The Person

For banks, personal credit is used to evaluate a real estate investment rather than the collateral property; for hard money lenders, the opposite is true. This is where the term “common sense loan” is derived in private lending. If the loan-to-value makes sense, and we determine the project is viable, we will make common sense loans. Private lenders will get to know their borrowers, but credit score does not determine the viability of a deal. The real estate does.

The Property

Some of the most profitable real estate deals are for properties that are broken, not habitable, “fixers.” Our borrowers typically identify these properties and can buy them at discounts given their current state. While traditional financial institutions may be prevented from lending against properties with violations or existing damage, private lenders like us love to see great developers take on these rehab projects and earn outstanding returns. We understand that these properties can return remarkable value with the right developer, and we are happy to facilitate the process.

In these cases, hard money lenders make investment decisions on an individual basis to meet demand that cannot otherwise be met by banks. The deal may be urgent, the person may have credit issues, or the property may be damaged. In these cases, we can make common-sense loans and close. Because of our speed and our flexibility, we help borrowers realize higher potential returns otherwise unachievable with traditional financial institutions. We end up being “cheaper” than banks simply because we can get the deal done.


Whether you’re in need of a bridge loan, fix or flip loan or construction loan, we are ready to help get you the loan you need that works best for you. Don’t hesitate to contact us today at 415-820-4770 or click here to send us a message.

Want to Learn More About Us? Check us out here on our About Us page, or take a look at our FAQ page.


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