What is a commercial hard money loan?

A commercial hard money loan is a short-term, asset-based loan funded by private investors or companies rather than traditional banks. Approval is based primarily on the property's value (collateral) rather than the borrower's creditworthiness or income. This makes hard money loans accessible for borrowers with poor credit, foreign nationals, recent foreclosures, or properties that do not meet conventional lender requirements. Hard money loans close quickly (often within 1–2 weeks) but come with significantly higher costs — interest rates of 9%–15%, origination fees of 2–5 points, and short terms of 6–24 months. They are best used as a last resort or short-term bridge strategy.