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How Money Loans Work

You might want to purchase a property but lack enough money to invest in a business deal, but your salary doesn’t cover it. This is where money loans come in handy. Banks and loan companies like come in. They agree to lend you some money you will repay at interest in a specified amount of time. Hence, you can cater to your immediate needs. But what are money loans? How do they work?

What Is A Money Loan?

This refers to a secured loan used for buying hard assets and real estate in most cases. Rather than rely on your creditworthiness, money loan companies weigh the merits of that investment you want to fund and then use the investment as collateral. Traditional lenders like banks won’t offer such loans.

How Do Money Loans Work?

The work of any investor is to look for a worthy investment. For instance, a realtor identifies a property. They then renovate and repair the property to increase the resale value and later resell it at a profit.

As said above, the investor might face some issues with financing during the purchase of the property or investment. Depending on the type of investment, they might need some quick funding to invest, like making the property resaleable immediately.

Traditional bankers might never finance money loans because of the high loan to value (LTV) ratio (over 75%). That’s where hard money loans come in. By weighing the merits of the investment, companies, investing groups, and other private players can finance it and take the 1st position to lean on the property. Hence, the financier will get paid first in the capital stack.

The investment or real estate property is offered collateral security to the financing company. Since the loan is short-term, the lender isn’t concerned with your credit history or income. Hence, they don’t make long-term investments. The interest rate is also higher than what you would get from a traditional lender.

The money loan company will also have a say in managing the investment. They want to make sure that they get their money back with interest. So, you should expect periodic reports on the progress of the investment.


Money loan companies are saviors when you have a competitive bid that you cannot finance. Unlike traditional lenders, they will finance you in a matter of days, making that great deal you yearn for to go through. Do you need a money loan to purchase a property in California? Contact us at California Hard Money Direct. Depending on the investment market, we’ll fund you within no time.