As a broker, your credibility rests on being able to answer client questions clearly and confidently. The challenge is that many investors are new to private lending—and “hard money” often comes with myths or confusion.
Having ready-to-go answers to private lender client questions not only helps you close deals faster but also strengthens trust. This FAQ guide is designed to make your job easier by giving you concise, client-friendly talking points you can use right away.
Common Client Questions About Hard Money Loans
1. What exactly is a hard money loan?
A hard money loan is a short-term real estate loan from a private lender, based primarily on the value of the property (and its after-repair value, if it’s a rehab). Unlike banks, we don’t require years of income statements or perfect credit.
👉 Broker talking point: “Think of hard money as fast, flexible capital designed to help investors move on opportunities quickly, even if banks say no.”
2. How is hard money different from a bank loan?
Banks want W-2s, tax returns, and months of underwriting. Hard money lenders focus on:
- The property value
- Your equity (typically 25–30% down)
- Your exit strategy (sale or refinance)
👉 Broker talking point: “If you need speed, flexibility, or financing for a property banks won’t touch, hard money is often the better fit.”
3. How fast can I close with hard money?
Most private lenders can close in 5–7 business days, sometimes faster if title is clear. Compare that to 30–60 days for a bank.
👉 Broker talking point: “This speed is why hard money is so powerful in competitive markets—your clients can compete with cash buyers.”
4. What are the rates and terms?
Hard money loans are more expensive than bank loans. Typical terms:
- Interest: 9–12% (interest-only)
- Points: 1–3% upfront
- Term: 6–12 months (sometimes up to 18)
👉 Broker talking point: “Yes, the cost is higher—but it’s designed to be a tool. Most investors use hard money short-term, then refinance or sell.”
5. What types of properties qualify?
Hard money lenders typically finance:
- Fix-and-flip projects
- Short-term rentals (Airbnb, VRBO)
- Small multifamily properties
- Land or construction projects (case-by-case)
👉 Broker talking point: “If it’s an investment property in California with value-add potential, we can usually fund it—even if banks won’t.”
6. Do I need perfect credit?
No. While credit is considered, it’s not the primary factor. Property value and equity matter most.
👉 Broker talking point: “You don’t need perfect credit. What matters is that the deal itself makes sense.”
7. What’s an exit strategy, and why does it matter?
An exit strategy is how the borrower plans to repay the loan—usually through selling the property or refinancing into long-term financing. Lenders need this for underwriting.
👉 Broker talking point: “The loan is short-term, so we want to know how you’ll pay it off. That protects both you and the lender.”
8. What if my deal takes longer than expected?
Extensions are often possible for an additional fee. Communication is key.
👉 Broker talking point: “We understand timelines can shift. As long as you’re transparent, we can often extend the loan so you can finish your project.”
9. Are there upfront fees?
Legitimate lenders charge appraisal or processing fees, but beware of large upfront “application” fees before approval.
👉 Broker talking point: “At Lending Bee, we’re transparent about costs. You’ll see a clear breakdown of points, interest, and closing fees before you sign.”
10. Why should I use hard money if it costs more?
Because speed, flexibility, and opportunity often outweigh cost. If your profit margins or long-term plans make sense, hard money is simply another line item.
👉 Broker talking point: “Investors use hard money to capture opportunities they’d otherwise miss. Paying a bit more for financing often means making a lot more on the back end.”
How Brokers Benefit From Having Answers Ready
- Win client trust quickly
- Prequalify leads by filtering out clients with unrealistic expectations
- Boost confidence in presenting hard money as a legitimate financing option
- Protect your reputation by aligning with transparent, reliable lenders
Why Lending Bee Equips Brokers With FAQs
We want our broker partners to feel confident. That’s why we:
- Provide clear program guidelines upfront
- Offer FAQ handouts you can share with clients
- Back you up with fast responses so you don’t get stuck answering tough questions alone
When you work with us, you’re never left guessing.
Your role as a broker is more than connecting clients to financing—it’s about building trust. Having confident, concise answers to the most common private lender client questions is the difference between losing a prospect and closing a deal.
Lending Bee makes it simple: we equip you with tools, FAQs, and support so you can deliver clarity and speed to your clients. Learn about zero-points program here.