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What differentiates hard money lenders from bank lenders?

The main difference between banks and hard money lenders is the fact hard money lenders are asset baed lenders. They focus on the collateral associated with the loan. In contrast, traditional banks focus on credit and cash flow. It’s super important to remember hard money loans are not good for the long term. The purpose of a hard money loan is to be a short term loan that gets you the property you’re trying to purchase. Hard money lenders focus on short term loans that reap high profits. If you fail to repay the loan, a hard money lender can foreclose on your property in order to repay his/her loan.¬†