Hard money loans (or bridge financing) are loans you can get approved easier and quicker than you would at a conventional bank. Of course there are downsides to this arrangement such as higher interest rates. But if you’re a real estate investor there are times when a quick approval is necessary to pick up a property that would otherwise be picked up by someone else. In those cases hard money loans can make all the differences.
One of the main downsides for an investor taking a loan out of a conventional bank is the relatively long approval times that can deprive them of golden investing opportunities. With hard money loans all you need to get approved is some good collateral which could also include a piece of property. This is different from conventional loans where your “background” is the significant qualifier. This is how even a person with bad credit history is able are able to get these loans.
