6 Best Hard Money Lenders for 2022
This article is part of a larger series on Business Financing.
The best hard money lenders should provide a variety of loan options for fix-and-flip or fix-and-hold investors. These loans are typically for businesses that cannot get funding from other traditional lenders due to credit issues or properties in disrepair. While this means rates and fees for hard money loans tend to be high, the best lenders should provide the lowest rates and fees among hard money lenders.
In addition, the best hard money loans should close in a few days, allowing investors to compete with cash-only buyers for property purchases. Some lenders will work with first-time investors, while others require previous fix-and-flip experience or rental ownership.
Here are the six best hard money lenders for business:
- Kiavi: Best overall for new and experienced flippers wanting low rates and fast funding
- Lima One Capital: Best for larger short-term residential fix-and-flip loans
- Visio Lending: Best for refinancing or growing a rental portfolio
- RCN Capital: Best for borrowers wanting lower rates as investing experience grows
- AMZA Capital: Best fix-and-flip line of credit for experienced investors
- CoreVest: Best for experienced flippers with large portfolios needing large loans
If you’re considering a hard money loan, it’s critical that you run an investment property cash flow projection to ensure the rental income or fix-and-flip profits cover all costs, including the costs of the hard money loan. Focus on positive cash flow and calculate all projected income and expenses.
Best Hard Money Lenders At a Glance
Funds First-time Flippers | Starting Interest Rate | Maximum Loan Amount | Term | Time to Funding | Minimum Credit Score | |
|---|---|---|---|---|---|---|
 | Yes | 6.95% | $1.5 million | 12, 18, or 24 months | As soon as 10 days | 660 |
 | Yes | 7.99% | $20 million | 13 to 36 months short-term; up to 30 years rentals | As soon as 15 days | Between 600 and 660 |
 | Yes | 5.3% | $3 million | 5 to 30 years | As soon as 21 days | 680 |
 | Yes, but better rates for experienced investors | 9.24% | $7.5 million for 1 to 4 family/condo/townhome; $10 million for multifamily or mixed-use | 12 to 18 months | As soon as 10 days | 650 |
 | At least 5 previous flips or 1st-time with mentor & licensed contractor | 7% | $2.5 million term loan; $50 million line of credit | 12 to 24 months | As soon as 2 weeks | 650 |
 | No; complete 3 fix-and-flips or manage rentals | 8% | $50 million | 18 to 24 months | As soon as 15 days | Not indicated |
Kiavi: Best Overall for New and Experienced Flippers Wanting Low Rates & Fast Funding
Kiavi is our best hard money lender with no hidden fees, fast funding times, and low interest rates. You can get up to $1.5 million in funding in as few as 10 days. It doesn’t require an appraisal and doesn’t charge application fees, points at exit, and prepayment penalties.
In addition, it doesn’t require income, employment, or asset verification. You can get up to 90% of the purchase price and 100% of the rehab costs, along with up to 75% of the ARV.
Kiavi can fund first-time flippers and those with fewer than five flips in the last 24 months. Experienced flippers, with five or more flips in the last 24 months, can get a dedicated manager, lower closing fees, and quicker closings.
You can contact the lender via a toll-free phone number with questions or apply directly through its website. Kiavi will use a soft credit pull to prequalify you online, with the prequalification letter available for download from the website.
Lima One Capital: Best for Larger Short-term Residential Fix-and-Flip Loans
Lima One Capital provides several options for hard money loans, including fix-and-flip, fix-to-rent, bridge plus, and value-add bridge loans. The maximum loan amounts vary depending on the type of loan, with fix-and-flip and construction loans at $5 million and value-add bridge loans at $20 million.
Required minimum credit scores vary per product, ranging between 600 and 660. Lima One Capital is open to both new and experienced investors. Most loan options are short-term loans with a maximum term of 24 months, whereas the value-add bridge can go up to 36 months.
If you choose the fix-to-rent, the initial loan is up to 24 months. Once it’s financed into a permanent loan, that loan can go up to 30 years.
Lima One Capital has a “get started” button at the top of its website. Once you click it, you’ll choose the type of loan desired. Then, you fill out a form with your contact information and information about your business. Once completed, a representative will contact you to continue the application process.
Visio Lending: Best for Refinancing or Growing a Rental Portfolio
Visio Lending has many different lending products, including single-rental loans, blanket loans for multiple properties, and bridge loans. In addition, it offers portfolio lending for vacation and short-term rental properties. No personal debt-to-income (DTI) is calculated, meaning the borrower qualifies based on property cash flow and business debt service coverage ratio (DSCR).
For Visio’s rental property program, the company offers 30 years terms with no balloon payments. No tax returns are required, but you must be incorporated to borrow.
Visio Lending has the highest minimum credit score requirement on this list, so lower-credit borrowers may want to consider another provider. For investors wanting to purchase and renovate properties, it’s a good choice. While you can’t fill out an application through its website, you can fill out a contact form to have a representative get in touch with you.
RCN Capital: Best for Borrowers Wanting Lower Rates as Investing Experience Grows
While RCN Capital is open to working with new fix-and-flip investors, it prefers experienced investors and provides better interest rates to more experienced investors. Starting interest rates vary depending on the amount of flipping experience you have. Here are the rates and levels of experience
Experience Level | Number of Flips or Rentals Owned | Starting Interest Rates |
|---|---|---|
New | Up to 2 flips completed or up to 2 rentals owned in last 3 years | 10.99% |
Intermediate | 3 to 10 flips completed or 3 to 10 rentals owned in last 3 years | 9.49% |
Experienced | 10 or more flips completed or 10 or more rentals owned in last 3 years | 9.24% |
You can borrow up to 85% LTC and 100% of the renovation costs, with closing in as soon as 10 days. RCN Capital is available in most of the United States. However, residents of Alaska, Minnesota, Nevada, North Dakota, South Dakota, and Vermont aren’t eligible.
A minimum credit score of 650 is required for qualification. Loan terms are typically 12 months, with a six-month extension available. There’s no prepayment penalty with RCN Capital loans.
RCN Capital offers you the option of applying through its website. In addition, it has live chat operators available to answer any questions you might have before applying.
AMZA Capital: Best Fix-and-flip Line of Credit for Experienced Investors
For the experienced flipper, AMZA Capital is a great choice for a hard money loan, especially a fix-and-flip line of credit. Experienced investors can qualify for a fix-and-flip credit line of up to $50 million. This can be used on single-family, condos, townhomes, and multifamily properties of fewer than 20 units.
Lending is available nationwide, with loans covering 80% of cost. You can borrow for up to 24 months, with revolving options available.
The company prefers to work with investors with at least five flips completed. However, it’s also willing to work with first-time flippers, but they must have a mentor and a licensed contractor.
It offers two other varieties of hard money loans. You can get a term loan of up to $2.5 million for up to 12 months, and funding takes place within two weeks. These loans are available to foreign nationals.
It also has a buy-to-rent loan of up to $2.5 million. Terms of 24 months with a 12-month extension are available. You need at least a 660 credit score to qualify, and the as-is appraised value must be at least $116,000. The rent coverage ratio―monthly rent divided by monthly interest―must be at least 1.25.
AMZA Capital’s website has an online form for a free quote. Once you submit it, a representative will reach out to get the process started.
CoreVest: Best for Experienced Flippers with Large Portfolios Needing Large Loans
CoreVest is an excellent choice for business owners looking to fund larger projects, with bridge loans of up to $50 million available. The fix-and-flip credit line allows builders to complete projects, sell them, and continue with a revolving line of credit they can use for their next flip. Credit lines go from $200,000 to $50 million.
The company doesn’t list a minimum credit score on its website. It considers the borrower’s track record, personal financial statements, and liquidity rather than credit score.
Lines of credit run from 18 to 24 months and can be used for single-family, condo, townhome, and multifamily properties. Lending is available nationwide and is available to foreign nationals.
CoreVest requires you to have flipping experience, and it typically wants investors to have at least three fix-and-flips completed or manage rental properties.
It has an online application and a chatbot on its website, which can help you start the process. It also offers an 800 number if you prefer to speak to someone on the phone.
How We Determined the Best Hard Money Lenders
When comparing the best hard money lenders, we considered loan rates, terms, and required borrower qualifications. We also took into account whether the lenders would work with new investors or if they required prior experience to obtain financing. We even looked at funding speed and maximum loan amounts when compiling our list.
Before applying for a hard money loan, check out our guide on how to get a small business loan. Our article on investment property financing and requirements will also help you through the process.
Frequently Asked Questions
How do hard money loans work for beginners?
Some hard money lenders will require you to have flipping experience or rental property ownership to obtain a hard money loan. However, lenders such as Kiavi and Lima One Capital don’t require flipping experience, so choose one of those if you are a beginner just getting into flipping.
How do you qualify for a hard money loan?
Qualifications for hard money loans tend to be less stringent than other commercial real estate loans. They often require you to qualify as an incorporated business rather than an individual. While they may consider a minimum credit score (usually around 650), they often rely on your investing experience and the potential property earning capacity to determine whether you qualify for the loan.
Is hard money lending a good idea?
If you don’t need funding quickly, hard money loans aren’t a good idea. They have high interest rates, high fees, and short repayment terms. The advantage of a hard money loan is you can be funded in as little as 10 days. If you don’t need the money right away, if you have a strong credit profile, and if the property isn’t in disrepair, you should consider other types of commercial real estate loans, such as Small Business Administration (SBA( loans.
Bottom Line
For investors looking to purchase property to fix and flip, hard money loans are a great way to obtain large amounts of funding in a short period. While their rates and fees are high, they often can be funded in as few as 10 days. These are best used when time is of the essence due to competing with cash buyers. They can also be used when borrowers have low credit scores or the property is in disrepair. Be sure to calculate the costs involved with a hard money loan before deciding to apply.
