by 
The Curious Bag
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Hard money lending is a form of private lending for residential and commercial real estate. Traditional banks and other lending institutions do not usually engage in hard money lending.
Facts
Hard money lending requires borrowers to offer collateral for the loan. Collateral is usually secured by the real estate involved in the transaction.
Considerations
Interest rates are typically higher with hard money lenders, since they take on loans that are risky. Hard money loans are less secure than traditional subprime mortgages.
Time Frame
Because hard money loans are for real estate transactions, lenders can offer a variety of time limits. The length of the loan is negotiated with the lender, along with the interest rate.
Benefits
Individuals and companies choose hard money lenders since they may not require the excessive amount of paperwork as traditional banks. Less information and documentation generally allows hard money lenders a quicker turnaround time for funding loans.
Warning
Hard money lending is not federally regulated, leaving loan terms and lender requirements open-ended. Few states have regulations on this practice, requiring borrowers to thoroughly inspect hard money lenders before obtaining loans.
Source:
Bankrate: 'Hard money' lenders: The source for last-resort loans
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