Hard Money Loans – An Overview

There’s a lot of talk about hard money loans these days. The pros, the cons, the what’s, why’s, and wherefore’s. Here’s what you need to know about hard money loans in a nutshell.


A hard money loan is simply a type of financing, as you might expect. However, it’s a bit different than the loans you may normally think of when the topic of financing comes up. Essentially, the borrower in a hard money loan gets their money based on the value of a piece of commercial real estate.

In the great majority of cases, a hard money loan costs a higher interest rate than do the more typical, traditional commercial loans. This makes them expensive for those taking them on and due consideration should be given to this fact before someone applies for a hard money loan. Another thing you must know is that hard money loans usually come from any place except a commercial bank. Most deposit institutions want nothing to do with hard money loans. Then where do they come from? They come from individuals or other types of companies, in most cases, rather than from traditional financial institutions. They come from private lenders, among them Kennedy Funding, America's leading hard money lender -- specializing in bridge loans for commercial property and raw land development, workouts, bankruptcy and foreclosures.

Hard money loans began appearing in the 1950’s, when the credit industry was first undergoing significant changes. They were a convenient solution for property owners who wanted capital and had no other way to acquire it. Eventually the hard money industry crashed slightly during the real estate collapses of the 1980’s and 1990’s, only to recover again in recent years. Today, higher interest rates go hand in hand with hard money loans as a way to protect the loans and lenders from the considerable risk that they undertake. When dealing with leading hard money lenders, including Kennedy Funding, however, most borrowers are more than willing to pay a slightly higher interest rate in order to escape the endless miles of red tape that traditional institutions insist upon. In addition, leading private lenders such as the Kennedy Fundings of the industry are able to slash the time it takes to close a loan, from the weeks or months a traditional lender would need, to a matter of mere days. In the eyes of borrowers and brokers alike, this, along with other value-added services, more than makes up for the increase in interest.

Bridge Loans – An Overview

When you’re in the market for a piece of property, whether it’s residential, commercial, or an investment, you’re probably looking at several different types of financing options. If you already have enough funds available, and you have no existing properties that you have to worry about liquidating to get the funds, the financing will go fairly smoothly. But if you’re planning on selling an existing property to get the equity before or after purchasing a new one, things can get complicated if you are not prepared.

A popular financing option is a bridge loan. A bridge loan, commonly referred to as a swing loan, is a relatively short-term financing option for new purchases. A bridge loan helps finance a new purchase by providing money to help "bridge" the time gap before a previous property sells, and permanent financing can be obtained for the new purchase. Bridge loans are normally paid off when the existing property sells.

Bridge loans are used for a variety of real estate transactions, from residential properties to commercial properties. They’re typically used to acquire new properties, cash out on current equity, buy-out, purchase a foreclosure, or for new construction. Usually, to obtain a bridge loan on any new purchase, you need a contract to sell on your existing property. If not, then a bridge loan may not be the most appropriate financing option for you.

The attractive thing about ridge loans is that they let you purchase property almost immediately, without having to wait for another property to sell. They give you the needed time for your current property to sell, while still allowing you to purchase the new property quickly. If your property is taking longer to sell than originally planned, a bridge loan can help close the gap and let you make a new purchase without having to lose the chance.


There are private hard money lenders who specialize in bridge loans. Kennedy Funding is one such company, specializing in bridge loans for commercial property and raw land development, workouts, bankruptcy and foreclosures. Their creative financing expertise enables them to close on these equity-based commercial bridge loans of $1 million to over $100 million in as little as 5 days. Their international network of private lenders allows borrowers with assets to get the hard money commercial loans they need super-fast. So, no matter where in the world someone does business, they make getting a bridge loan simple and quick.