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At Tower Fund Capital, we are in the habit of approving hard money rental loans for our clients using the asset in question as the collateral for the loan. If you need a loan with a fast approval and a quick closing, speak with an agent from Tower Fund Capital about applying for a hard money loan to purchase a rental property.

A hard money loan is a type of loan secured by real estate. Hard money loans are considered "last resort" loans or short-term bridge loans.

These loans are primarily used in real estate transactions, and the lender is usually a non-traditional lender. That is, individuals or legal entities and not banks.

Today we will explain what they are, how they work and their advantages and disadvantages.

Get a hard money loan fast today and finance that real estate project you dream of.


What are hard money loans?


If you've ever heard the phrase "cold hard cash," then you know about cold hard cash. It is money from a valuable asset, such as precious metals or cryptocurrencies. The units, tens and twenties we use to buy goods at the store are called "soft" money because they are backed by a promise rather than something tangible.


People borrow hard money when they want to buy property. They expect to turn around and sell quickly. Because the loan is for such a short period, it makes more sense to get a hard money loan than to get a traditional loan from a bank. In addition, this loan can be obtained faster than other lending institutions because the loan is based on the asset itself.

How hard money loans for real estate investments work

Hard money loans have terms that are based primarily on the value of the property being used as collateral, not on the credit quality of the borrower. Since traditional lenders, such as banks, do not make hard money loans; hard money lenders are often private individuals or private companies that see value in this type of potentially risky venture.

Investors may apply for hard money loans who plan to renovate and resell the real estate being used as collateral for the financing, often within a year, if not sooner.

The higher cost of a hard money loan is offset by the fact that the borrower intends to repay the loan relatively quickly (most hard money loans are for one to three years) and by some of the other advantages they offer.


Hard money loans can be viewed as an investment. There are many who have used it as a business model and actively practice it.

Get one of the best hard money loans with one of the best private lenders in the United States.


Advantages and disadvantages


The pros


One of those advantages is that the approval process for a hard money loan is usually much faster than applying for a mortgage or other traditional loan through a bank. Private investors backing the hard money loan can make decisions faster because they often do not run credit checks or examine the borrower's credit history, the steps lenders usually take to investigate an applicant's ability to make loan payments.

The cons

Because the property itself is used as the only protection against default, hard money loans generally have lower loan-to-value (LTV) ratios than traditional loans: around 50% to 70%, versus 80% for regular mortgages (although it can go higher if the borrower is an experienced flipper).

Want to contact a hard money lender?

Tower Fund Capital is one of the top mortgage lenders in the United States. Its multidisciplinary team is composed of diverse professionals from the banking, financial and real estate sectors.

In addition, its transparent relationship with clients and colleagues has earned it a good reputation and rating from appraisal firms such as Bowery Valuations.

Log on to Tower Fund Capital's website today and schedule a meeting with the friendly and professional team of advisors. Make your dream a reality.


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