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Hard Money Vs Bank Financing

What are the differences between Hard Money Loans and Regular Bank Financing?

In a stark contrast to traditional bank loans, your ability to obtain hard money or a hard cash loan in Jacksonville will most often not depend on your credit history or your credit score.  Rather the primary determining factor is the property itself.  

More accurately, hard money lenders concentrate more on the “after repair value,” or ARV of the real estate you are taking a loan out against.

The ARV is essentially an estimate of the value of the property once the improvement plans are completed. So when searching hard money lenders near me it’s important you are able to identify a reputable hard money lender with good and competitive terms.

As a local Jacksonville lender of  hard money and a hard money broker we will typically loan between 65% and 70% of the ARV. That is not all we look at when assessing a loan application, but it’s an important point anyone new to hard money loans should be aware of.

Now, both traditional bank financing and hard money is readily available for residential and commercial real estate in Jacksonville. To clearly explain how hard money and bank financing differs it can be helpful to look at the differences according to three categories.

1. The Speed of Getting Funded

The period of time needed to secure a hard money loan is significantly less  than the amount of time needed to obtain bank financing. This alone is a massive advantage of hard money for many borrowers, because this speed allows people to get the money they need to avoid foreclosure to win deals in a real estate market where there are cash buyers and those who need to wait for bank financing will likely lose out on the deal. We typically loan in 7 days or less from the first application, and for people who have borrowed from us before this can be reduced to just a couple of days. Conventional bank loans on the other hand will typically take anywhere from 30-60 days from application to money in the account.

2. Flexibility of Lending Standards 

As we touched on earlier, hard money lenders, like Jacksonville Hard Money Lenders pay more attention to the deal (or real estate) itself, and as a result pay less attention to the credit history and poor credit scores of borrowers. In fact we specialize in hard money loans for bad credit. Traditional bank landers on the contrary consider a person’s credit history to be a primary factor in whether they will issue a loan or not. 

So as you might be able to tell, when you apply for your hard money loan, we will be very interested in reviewing your underwriting & your history (or that  of your teams/partners) working with the specific asset class if you are loaning against real estate. If it’s a Jacksonville business loan you’re seeking, similarly we will be keen to learn more about your experience in your industry.

3. The Price Of Money 

Because Jacksonville Hard Money Lenders (and other hard money lenders) are prepared to overlook a less than stellar credit history and accept a higher level of risk with our loaned money, the interest rates are higher than conventional bank financing. 

With that said, despite what might be a popularly held belief, no hard money lender wants a borrower to have to foreclose on a property. At the same time no hard money lender wants to take ownership of the foreclosed property. In order for us to sell the property and recoup our losses, there are considerable costs and lots of time needed, neither of which suit our business model and are in our best interests. 

And this is an important point because we are incentivized to lend money at rates that work for both you as the borrower and us as the lender. 

Hard Money lending is ultimately popular because it allows people to leverage the money and make a lot more money, money they would not have made without hard money in all likelihood. 



Loans from $50K - $50MM

Money in 7 days or Less
No Prepayment Penalty

Flip | Multi-family | Office | Land | Ground-Up


Bad credit not a problem
Rates from 7.99%
0 – 36 months

“Real professional outfit throughout the entire process from my loan application to getting funded. All my questions were answered. I’m now in the middle of a multifamily rehab which we are looking to sell within 6 months. And we already have a new deal we need more hard money for.”  

Timothy R. - Multifamily Deal Sponsor

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“My husband and I were rejected by our local bank for financing for a fix and flip project on our street. A friend suggested Jacksonville Hard Money Lenders. They explained everything really clearly. I have no idea that hard money was actually better for us because of how fast we wanted to sell.

Samantha K. - First Time Flipper

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A typical one week process that is as straightforward as we are.

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