What’s the Difference – Hard Money vs. Private Money Lenders?

Sometimes used interchangeably, but these two terms are not always synonymous. However in most cases each lender is loaning funds on collateralized real estate backed by a 1st trust deed or possibly a 2nd.  

Hard Money Lenders are those business organizations who charge normally higher interest rates, are shorter term loans (6 months to a year), require appraisals, charge various fees for construction draws, inspections etc., are less flexible with loan terms, and in many instances are not local.

Private Money Lenders can be individuals or a group of investors who provide funds to borrowers with much more reasonable terms and flexibility. In most cases interest rates are lower, loan terms longer (6 months to 5 years), more flexible with using comps., and pictures rather appraisals, and personable in that borrower lender relationship is a more local hands on scenario.  At CFG we are Private Money Lenders where funds are provided through Group Investor Participation and not institutional sources.  We want to know our borrowers personally and build on future long-term business relationships to meet their real estate goals for years to come.



Borrower can receive a decision 1 to 3 days.
Provide funding -10 to 14 days.


Real Estate is basis of our flexible lending decisions. Borrowers pay interest monthly to benefit cash flow.


All loans fully serviced by CGF.

Real Estate- Tax Corner Failing to engage in rental activities cost a couple an ordinary loss. Couple purchased a historic mansion with the intent of renovating it. They spent time, effort and money restoring property, which took six years. Neither they nor anyone else lived in the home while couple owned it. Couple sold property for a large loss one year after renovation was complete and deducted loss as ordinary, claiming it was from a rental business.

An appeals tax court ruled the loss must be taxed as a capital loss rather than ordinary loss. The couple did not commence any rental activity other than engaging a real estate agent to sell property before it was even ready to be occupied. (Keef, 2nd Cir.).