Hard money or private money? Mostly two names for one loan.
Both mean a short-term loan for a real estate investor, decided on the property and not on tax returns, made by someone who is not a bank. Investors use the words for the same thing. The difference that matters is who is on the other side: a lending company with set programs, or an individual lending their own money.
A lending company or an individual.
| Term | A lending companyoften called hard money | An individualoften called private money |
|---|---|---|
| Who lendsWhose money it is. | A company whose business is lending | A person: a friend, a relative, another investor |
| How it is decidedWhat sets the terms. | Published programs: the same rules for every borrower | Whatever the two of you agree |
| What it costsRate and fees. | A rate and origination points, stated up front | Anything from a favor to more than a lender charges |
| SpeedFrom yes to money. | Days to a few weeks, on a set process | As fast as that person can decide and wire |
| Renovation moneyOn a flip. | Released in draws against the work | Often handed over in one sum |
| When something goes wrongA delay, a cost overrun. | Extensions and a servicing team, on stated terms | A conversation with one person |
| The next dealAnd the one after. | The same terms again, and better with a track record | Only if that person still has money to lend |
Neither is better in itself. A relative who lends at a low rate is hard to beat on one deal; a lending company is what makes the fifth deal possible.
What our loans cost.
| Term | Fix & flip · SilverBest rate | Fix & flip · Max LeverageUp to 95% of purchase | Ground-up1–4 units |
|---|---|---|---|
| Rate fromSet by experience, credit, leverage and the property. | 8.99%* | 9.75%* | 9.85%* |
| OriginationPoints, paid at closing. | 1.25 points | 1.75 points | 1.25 points |
| PurchaseAdvanced at closing. | Up to 90% | Up to 95% | Up to 80% |
| Renovation or constructionReleased in draws. | Up to 100% | Up to 100% | Up to 100% |
Each program’s full terms are on its page: fix & flip, ground-up construction.
Hard money and private money questions
Is a private money lender the same as a hard money lender?
In everyday use, yes: both make short-term, property-based loans to investors and neither is a bank. Strictly, a hard money lender is a lending company and a private money lender is an individual lending their own funds.
Which is cheaper, hard money or private money?
It depends on the person. A relative may charge less than any company; a stranger lending privately often charges more. A lending company’s rate and points are stated up front.
Which is faster?
A lending company closes in days to a few weeks on a set process. An individual can be faster or slower: it depends on one person.
Are hard money lenders licensed?
Rules differ by state and by loan. A lender’s NMLS number, where it has one, can be checked on NMLS Consumer Access. Ours is in the footer of every page.
Why do people say "private lender" now?
It is the newer name for the same business. More investors search for "private lender" today than a few years ago, and fewer for "hard money".
Which one are you?
A direct private lender: a company that prices, closes and funds its own loans and their draws. Call it hard money or private money. How our hard money loans work.
Do either need my tax returns?
Not for these loans. They are decided on the property and the plan. Expect entity documents, ID, the contract and bank statements.
Can I refinance either one into a long-term loan?
Yes. Once the property is rented, a 30-year DSCR loan pays it off.
Have a deal? Send it to the lender, not a middleman.
The purchase price, the plan and your timeline, or price it yourself in the term sheet tool.
*For business-purpose loans on non-owner-occupied investment property only. Not available for personal, family or household purposes. All loans subject to credit approval, underwriting and property eligibility. Rates, leverage and terms are indicative, change without notice, and not all borrowers will qualify; not a commitment to lend. YS Capital Group · NMLS ID 2609746 · Equal Housing Lender.