Loans secured by real estate that is intended for fix-and-flip projects, real estate investment, or property development and have a short-term duration are known as hard money loans.
Rather than being based on the borrower’s credit history or income, hard money loans are usually issued by private investors or specialized lenders and the loan amount is determined by the worth of the property being used as collateral
Loans for real estate investment or development projects are usually quicker and simpler to get than bank loans, and they provide prompt access to money.
Although hard money loans tend to have higher interest rates and stricter loan requirements, including shorter repayment periods, they can be a more costly form of financing.
Hard money loans are typically used when traditional financing is not an option or when fast funding is needed.