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Common Misconceptions about Hard Money Loans

By June 10, 2020June 29th, 2023Hard Money Loans
hard money loans

Hard money loans are utilized quite often in real estate transactions by both new and experienced investors, flippers, and businessmen and women. Properly utilizing a hard money loan, can serve as an effective tool to complete a real estate transaction that could yield tremendous profit.

Let’s take a look at some of the most common hard money loan myths and misconceptions, along with important facts that help to debunk these myths.

Myth No. 1 – All Hard Money Lenders are Loan Sharks

The overwhelming majority of hard money lenders in Los Angeles, and elsewhere, are businesspeople looking to invest their money in profitable ventures. It is true that many hard money loans are routinely secured by a property with equity between 30 and 50 percent. Nevertheless, this level of securitization is mainly a safety measure since many real estate ventures involve a higher level of risk.

Myth No. 2 – Loans via Traditional Banks are Always a Better Option

This is not an accurate claim since each real estate transaction or a fix-and-flip project differin financial needs and unique characteristics of the project. Hence, there are scenarios where securing a loan through a traditional bank is not the best option, especially when dealing with a time sensitive project in need of quick and secure funding.

Myth No. 3 – Only people with Bad Credit Apply for Hard Money Loans

Many people view those who stray from the traditional lending structure as desperate or incapable of receiving a loan from a bank, but that’s simply not the truth. For the most part, those who seek out a hard money loan are typically successful business owners who would prefer to work with a private investor over a bank or other financial institution, due to the trust factor and convenience.

Myth No. 4 –Hard Money Loans are Governed by Harsh and Unforgiving Rules

This is a big misconception since it assumes all hard money loans are governed by a monolithic set of rules and terms. This is not the case. The structure of a hard money loan will vary depending on the unique aspects of your project, your background, financial needs and so forth. To learn more please visit

Need Help Finalizing a Real Estate Transaction? Contact an Experienced Hard Money Lender in Los Angeles Today

If you are ready to finalize or move forth with your project and like to apply for a hard money lender in Los Angeles, contact the highly reputable and experienced professionals at PB Financial Group Corp. We are a premier direct hard money, private money and bridge lender in California. Our objective is to work to satisfy your financing needs on important real estate projects throughout California in an efficient and effective manner. To schedule a consultation or for any questions please contact PB Financial Group at 877.700.3707 or visit to learn more.


PB Financial NMLS #357614/DRE #01522495

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