The Big Idea 

The primary benefit of private (hard) money is speed.  These loans are funded by investors seeking yield (return on invested capital), and that incentive often supports faster decision-making and funding than institutional channels.

The second significant benefit is flexibility in underwriting—credit, income documentation, collateral conditions, and Borrower requirements can be managed more pragmatically, helping you feel confident in managing diverse deal scenarios effectively.

Typical funding window: 2 to 14 days, sometimes faster when a bank file already exists due to a decline or fallout, giving you confidence in rapid closing options when time is critical.

“A low rate doesn’t matter if you don’t close.”

The Trade-Off (The One Question That Matters)

Private money usually comes with higher rates and points, but that cost is justified if it prevents a bigger loss or missed opportunity.  Speed can outweigh the expense in urgent deals.

Would you trade a lower bank rate for a higher-cost loan if it saved your deposit or the deal?

“If missing the deadline costs more than points, speed is the bargain.”

The story highlights how a bank delay nearly killed the deal, jeopardizing a $100,000 deposit and the property.  Private money provided a fast solution that saved the transaction at a critical moment.

The couple had already put down $100,000.  The bank’s delay forced them to grant a two-week extension, releasing the deposit proceeds to keep the transaction alive.

Then the bank fixated on a minor title discrepancy—the kind of issue that looks small, but can freeze underwriting at the worst time.  The couple was suddenly in a race against time:

• Miss closing → lose $100,000, and
• Risk losing the property to a backup offer at a higher price

They called their mortgage broker in a panic.

The Pivot: Private Money Bridge Loan (Game Changer)

The broker pivoted quickly to a private money bridge loan (12-month, interest-only).  That pivot mattered because it didn’t require restarting from zero.

The private lender immediately acquired the existing file from the institutional lender:

• Open escrow
• Preliminary title report
• Application + financial statement
• Bank statements
• Insurance info
• Rental agreements (if applicable)
• Credit report + background search
• Appraisal (or valuation data)

With a quick appraisal review, the private lender approved the loan, substituted as the lender, drew documents and disclosures, and closed in five business days.

“The broker’s real value isn’t rate shopping—it’s pivoting under pressure.”