Private money loans provide a source of financing for lenders with bad credit or for unconventional purchases. New trends are showing this field is growing.

There are plenty of reasons to appreciate hard money lenders in California, Florida, New York, or wherever you may live. If the thought of investing in short-term real estate projects for profit interests you, such as fix-and-flip ventures, you’re going to need these lenders to help you start or further your interests.  This is especially true if you are seeking home loans with bad credit.

Yes, you’ll likely pay a little more in the way of interest than you would with a traditional bank loan.  It’s also true that most private money loans are short-term in nature (say, a year).  However, the trade-off is that private money lenders in California and other states can decide whether or provide the money you need without any credit checks.  Plus, you could gain access to funds almost immediately.

You should, of course, learn all you can about how the loan process works.  When you understand what you can expect, you won’t run into any surprises. Even if you’re buying a home with bad credit so you can flip it, you need to make informed decisions. Here are just a few of the latest trends in private money loans that every borrower should know about.

Decreasing Rates

As the economy recovers, the housing market stabilizes, and interest rates start to go up, borrowers could begin to see decreasing rates for hard money loans. This may have something to do with a decline in the number of borrowers seeking private lending.  Instead, these borrows are opting for more traditional loans. Hard money loans are still likely to have slightly higher interest rates, but competition for business opportunities could drive rates down somewhat.

International Lenders

Hard work and ingenuity have long been tenets of the American culture.  It’s no wonder international investors are looking to get in the game by offering hard money loans for a quick turnaround on profits. Industry experts are already seeing an uptick in foreign interests offering funding for investment property purchases as the housing market improves.

Commercial Loans

If hard money lending for individuals can show quick returns on investment, it stands to reason that lending for commercial projects could result in much more significant profits. Of course, the loans are larger to begin with.  However, investors have shown that they’re willing to take that gamble.


Technically, crowdfunding is not hard money lending, although the two are somewhat similar. We’re just starting to see websites like Fund That Flip, Realty Mogul, and VestMunity offering crowdfunding for the purposes of real estate ventures.  However, the Dodd-Frank Wall Street Reform and Consumer Protection Act and the Secure and Fair Enforcement (SAFE) for Mortgage Licensing Act (or other upcoming legislation) may thwart these efforts.  It remains to be seen how these sites will ultimately fare and if regulation will deem their activities to be unsafe and/or illegal.