Sometimes in life things happen we do not expect and accordingly we are not prepared to deal with such things. A tough area for many of us is unexpected bills. Most of us are living life on a budget that does not include abnormal events or occurrences involving financial demands. In such times, with limited options to borrow, a private hard money lender might be worth considering.

Private money is the realm of wealthy investors looking for opportunity to capitalize on the money they can freely lend. As a singular party or company lending source, hard money lending is the alternative to conventional, highly regulated lending by banks and other financial companies. Money can be loaned against an asset, such as equity in a home or real property, or to an existing or new business that clearly shows its profit potential or realized profit. ‘Clearly shows’ means documented by existing business operations or plan for an oncoming business.

The private hard money lender is not concerned with the borrower’s creditworthiness. They are only concerned about their return on investment from both time and asset source. So long as you have sufficient equity in your home or real property, or your business documents suggest profit from your business, you can be accepted with your loan request in as little as a day.

Keep in mind that since the private hard money lender does not reach in to your credit file, is not regulated in the same way as conventional lenders, they can legitimately charge a much higher interest rate on their short term money to you and they do. The rate can be as high as 18 percent and the payback terms require a significant monthly payment due to the short term nature of the loan, usually two years or less.

Is a private hard money lender in your future? Take time to consider the positives, such as fast money to work with, and the negatives, such as the high interest rate and consequences of failure to make timely monthly payments, before acting and learn from others’ experience doing such a loan.