When traditional bank financing isn’t the right fit, asset-based and business-purpose loans can provide the speed and flexibility needed to move a deal forward. Below is an overview of the most common loan types used by real estate investors and business owners.

A private mortgage loan is a real estate loan funded by private capital sources, such as individual investors or private lending groups, rather than banks or credit unions. These loans are secured by real property and are commonly used for investment or commercial purposes.

Private mortgage loans are known for their flexible underwriting and customizable terms. Instead of relying heavily on personal income or credit scores, lenders place greater emphasis on:

• The value of the property
• Market conditions
• The borrower’s experience
• The exit strategy

Common uses for private mortgage loans include:

• Purchasing investment properties
• Refinancing existing loans
• Funding renovations or value-add projects
• Financing unique or non-traditional properties
  

Private mortgage loans are often ideal for borrowers who need flexibility, faster timelines, or financing solutions that fall outside conventional lending guidelines.

A hard money loan is a short-term, asset-based loan secured by real estate. These loans are typically used when speed and certainty of closing are more important than long-term interest rates.

Hard money loans focus primarily on the property’s value and exit strategy, rather than the borrower’s credit profile. Because of this, approvals and funding can happen much faster than with traditional loans.

Hard money loans are commonly used for:

• Fix-and-flip projects
• Distressed or undervalued properties
• Auction or foreclosure purchases
• Time-sensitive acquisitions
• Short-term bridge or transitional financing
  

These loans are often structured for short durations and are designed to help investors act quickly, stabilize a property, and then refinance or sell.

A business-purpose loan is a loan used strictly for investment or commercial purposes and is secured by non-owner-occupied real estate. These loans are not intended for personal or owner-occupied residential use.

Business-purpose loans are popular among:

• Real estate investors
• Business owners
• Developers
• Entrepreneurs

Underwriting for business-purpose loans typically focuses on:

• Property value and income potential
• Market conditions
• Project feasibility
• Exit strategy

Business-purpose loans are commonly used to:

• Acquire income-producing properties
• Refinance investment or commercial real estate
• Fund renovations or improvements
• Support business expansion tied to real estate assets

Because these loans are asset-based, they often provide greater flexibility than consumer loans.

Private mortgage loans, hard money loans, and business-purpose loans are frequently used for short-term, transitional, and value-add real estate strategies, including:

• Property acquisitions
• Renovations and rehabs
• Bridge financing between purchase and permanent loans
• Stabilizing or repositioning properties
• Commercial and mixed-use projects

These financing options are designed for borrowers who need speed, flexibility, and customized loan structures when traditional lenders cannot meet the timeline or deal requirements.

Each loan type serves a different purpose, and the best option depends on:

• Your investment goals
• The property type
• Your timeline
• Your exit strategy

Working with an experienced broker allows you to match your project with the right capital source and loan structure, helping you move forward with confidence.

When evaluating private mortgage loans, hard money loans, bridge loans, and business-purpose financing, it’s important to understand a few additional factors that can significantly impact the success of your transaction. These considerations help ensure the loan structure aligns with your goals, timeline, and exit strategy.

Most asset-based loans are short-term in nature, often ranging from 6 to 24 months. Because of this, a clearly defined exit strategy—such as a sale, refinance, or long-term financing—is essential. A well-planned exit improves loan terms and helps keep projects on schedule.

Unlike traditional lenders, asset-based lenders may finance properties that are vacant, distressed, or in need of renovation. However, the property’s current condition, after-repair value (ARV), and feasibility of improvements play a major role in underwriting and loan structure.

These loans prioritize speed, flexibility, and certainty of closing. Interest rates and fees may be higher than conventional financing, reflecting the increased risk and faster turnaround. For many investors, the ability to close quickly and secure a property outweighs the higher short-term cost.

Asset-based loans typically require sufficient equity or value cushion. Loan amounts are often based on a percentage of the property’s current or projected value, making LTV a key factor in approval and pricing.

Borrower experience is often considered, especially for renovation, development, or construction projects. Experienced investors and operators may qualify for more favorable terms, particularly on complex or value-add transactions.

For renovation or construction projects, loans may be structured with draw schedules rather than lump-sum funding. Funds are released in stages as work is completed, helping manage risk and keep projects on track.

Local market trends, demand, and property liquidity influence underwriting decisions. Strong markets and clearly defined resale or refinance paths can positively impact loan terms.

Providing accurate information upfront—such as property details, budgets, timelines, and exit plans—helps streamline approvals and avoid delays. Clear communication leads to smoother closings and better outcomes.

Asset-based and business-purpose loans are often strategic, short-term tools, not permanent financing solutions. Many borrowers use them as a stepping stone toward stabilization and long-term financing.

Working with an experienced broker helps match your project with the right loan type and capital source, ensuring the structure supports both short-term execution and long-term success.

Both are asset-based loans secured by real estate, but they differ slightly in structure.
A private mortgage loan is funded by private individuals or private lending groups and often offers more flexible, customized terms.
A hard money loan is typically a short-term loan designed for speed and is commonly used for fix-and-flip or time-sensitive transactions. Both focus more on property value and exit strategy than personal credit.

No. The loans discussed on this website are business-purpose loans only and are secured by non-owner-occupied real estate. They are intended strictly for investment or commercial use.

Because these loans are asset-based, approvals and funding can often occur much faster than traditional bank loans, sometimes within days rather than weeks, depending on the transaction and documentation.

These loan programs may be used for a wide range of property types, including:

• Single-family investment properties
• Multi-family properties
• Mixed-use buildings
• Retail and office properties
• Industrial properties
• Special-use or unique assets
  

Perfect credit is not required. Underwriting primarily focuses on:

• Property value
• Market conditions
• Project feasibility
• Exit strategy

Credit history may be considered, but it is not the sole determining factor.

An exit strategy explains how the loan will be repaid, such as through a sale, refinance, or long-term financing. A clear exit strategy is a key factor in asset-based lending decisions.

Business-purpose loans are often used for:

• Acquiring investment properties
• Refinancing existing loans
• Renovations and rehabs
• Bridge or transitional financing
• Commercial and value-add projects
  

Getting started is simple. You’ll provide basic details about the property, project scope, timeline, and exit strategy. From there, the transaction is reviewed and loan options are structured to fit your goals.

A lending approach where loan decisions are based primarily on the value and condition of the property, rather than the borrower’s personal income or credit alone.

A short-term, transitional loan used to bridge the gap between purchasing a property and securing long-term financing or selling the asset.

A loan used strictly for investment or commercial purposes, secured by non-owner-occupied real estate. These loans are not consumer or personal loans.

The planned method for repaying the loan, such as selling the property, refinancing into permanent financing, or paying off the loan through other investment proceeds.

A short-term, asset-based loan secured by real estate, commonly used for fast closings, fix-and-flip projects, and time-sensitive investments.

The ratio of the loan amount compared to the property’s value. LTV is a key factor in determining loan terms and risk.

A property that is not used as the borrower’s primary residence, typically held for investment or business purposes.

A real estate loan funded by private individuals or private lending groups, offering flexible underwriting and customized loan structures.

Short-term financing used while a property is being renovated, stabilized, repositioned, or prepared for long-term financing or sale.

The process of evaluating a loan request by reviewing the property, market conditions, borrower experience, and exit strategy to determine risk and terms.