Hard Money Loans – How Much Can You Get?

A good question. And a tricky one. Because there are so many variables involved. Hard money loan minimums and maximums vary because of the nature of the loans. Since the money is coming from a private lender, it is largely up to the particular lender to decide what their minimums and maximums are. And they may change from situation to situation.


You should know, however, that there are usually minimums on hard money loans. So how do lenders decide what the minimum is going to be in your case? There are several factors they consider.

First, they look at the interest rate. For a higher rate, a smaller loan may be possible because of the money making versus risk ratio. Also, the investment itself may influence the minimum on the loan. If your reason for needing the money is a good one, then you may be able to get a smaller loan. If not, you may be stuck with finding another lender. Finally, a minimum may simply be determined by what the lender considers his time is worth. If you need a smaller loan, you can probably get it, but get accustomed to the fact that your search will take time.


As for a maximum, that also depends on several factors. One factor may be your relationship with the lender. The more you earn their trust, the more likely you are to get more money. Secondly, and most obviously, the resources of your lender are a factor. After all, they can’t lend what they don’t have. That’s why many borrowers go to the nation’s leading private money lenders, the Kennedy Fundings et al, who are able to close loans quickly, in a matter of days, and make loan amounts up to $100 million or more. Indeed, if your land collateral is great enough, and you establish a decent relationship with a Kennedy Funding or comparative company, you may even get significantly more.

Hard Money Loans – The Advantages

It’s true that hard money loans often come with much higher interest rates than traditional loans. So why on earth would anyone want one? You’re probably thinking that if you can get a bank loan in the traditional way for a lower rate, then there must be other advantages that accompany a hard money loan which make getting one appealing. And you’d be right. Read on for some reasons why a hard money loan may be just what the doctor ordered.


The most common reason to go after a hard money loan is to get the money faster. With a bank loan, you are usually looking at a 45-day minimum to get your money, and longer in most cases – up to six months isn’t uncommon. Private money, which is used in hard money loans, can usually be in the hands of the individual that applies for it in as little as 24 hours, which means you can start making use of it almost immediately. In the case of the leading private hard money lenders, Kennedy Funding prominent among them, you can have your money in as little as five days, with a commitment in two days or less. Lenders on the level of Kennedy Funding pride themselves on speed, and upon an ability to structure loans according to the borrower’s special circumstances. In other words, top hard money organizations are much more nimble and versatile than conventional lending institutions.

Another reason someone may investigate hard money loans concerns the current state of their property. If a property needs fixing up or does not produce cash flow, you usually can’t get a bank loan. But if you’re after a hard money loan, a private lender, say a Kennedy Funding, may be able to get you the money you need to fix up the property or get it to a state of making money. It’s good for both you and the lender, although at a higher interest rate price tag. The bottom line is, you’ll need to decide if the hard money loan is what you really need and if it will truly benefit you in the long run.

Lastly, if you’re looking to buy commercial property with no tenants, you’ll find that banks will typically not want anything to do with it. A hard money loan can help act as a financing bridge. The hard money can buy you time to get tenants and have them on-site for a year or more. At the end of that time, you can refinance at a lower rate with a bank and pay off the hard money loan in the process. Of course, you’ll still need to make the final determination whether or not a hard money loan is right for you. Many borrowers decide that the speed, which Kennedy Funding and other leading lenders provide, more than makes up for the increased interest rates that they’re required to pay.