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Why do people borrow hard money?

There are 4 primary reasons that people use private money or hard money financing, timing, property type, situation, and borrower. Institutional lenders disqualify loan request for one or more of these four reasons, causing the borrower to seek alternative financing options.


Timing is the number one reason why people borrow private money. Institutional lenders take 30 to 60 days to process, underwrite and close a loan request and commercial loans can take even longer. Private money loans can close as little as 5-10 business days.

Property Type

There are property types that do not meet institutional guidelines, such as mixed use, non-owner occupied investment properties, small retail centers, light industrial, and single purpose owner user properties.

As a lender that provides specialized financing, we understand the challenges borrowers face when seeking financing for unique property types.


There are many situations where borrowers take advantage of the flexibility of private money financing. Some of the situations include cash out, short sale, divorce, business opportunity, construction completion, or bridge loans.


There are many types of borrowers that will not fit into strict institutional lending guidelines. Some examples would include borrowers who have experienced a short sale, foreclosure or a bankruptcy. Borrowers that might be self employed, corporate borrower, Trusts, LLC, or resident alien. Additionally, borrowers that either cannot or choose not to provide verifiable income, or may own multiple properties.

Private money financing offers flexibility, competitive rates, and fast funding to serve many unique situations.

James Perry is President of Alliance Portfolio Private Equity Finance. For over a decade, Alliance Portfolio has been Southern California’s direct hard money lending authority, specializing in custom coastal loans for residential, commercial and mixed use properties. He can be reached at For more information, go to