The Quick Read: You can usually borrow hard money without owning a business, because the loan is judged on the property, the renovation plan, and your exit rather than on company financials or personal income documentation; lenders still check credit, equity, reserves, experience, and entity or personal-guarantee terms, and the details vary by lender, property, and experience.
- Leverage is set against project cost and after-repair value (ARV), not your paycheck.
- A 620 credit score is the typical floor, with extra conditions below 660.
- First-time investors qualify, but at the lowest leverage tier.
- An LLC is common but not always required. A personal guarantee is common either way.
- Reserves, a written budget, and a clear exit plan decide most files.
Most investors who search this topic want one answer: do I need a company before I can ask for a bridge loan? The short version is no. The longer version is about what a lender does when no company exists, and that is what this article covers.
What this loan actually costs to carry.
Hard money is sized against the project and priced by time. Enter the deal and see how much the program will lend, the cash required at closing, the carry while you hold it, and what is left at the exit.
Leverage tiers on the current program: 85% with fewer than 2, 90% with 2 or more, 93% with 5 or more completed projects — every tier capped at 75% of after-repair value. Loan amounts up to $5,000,000, larger by exception; terms of 6 to 18 months, interest-only, no prepayment penalty. The rehab portion funds in draws against completed work, not at closing.
Program parameters shown update from Lendmire’s centralized guideline source. Rate, points, and months are editable assumptions, not quoted terms.
Cost cap sets the loan · positive spread
Illustrative estimate only — not a quote, Loan Estimate, approval, or commitment to lend. Rate, points, and months are editable assumptions. Hard money is business-purpose financing for real estate investors, not a consumer mortgage. Leverage on the current program tops out at 93% of project cost for investors with a documented track record, capped at 75% of after-repair value, with rehab funding up to 100% of the documented budget released in draws; actual terms vary by lender, borrower experience, property, and exit. Lendmire is a mortgage broker, not a lender.
What Hard Money Is and What Lenders Actually Underwrite
Hard money is short-term, interest-only, asset-based financing for investment property. The lender’s first question is whether the property and the plan support the loan. The borrower’s income comes second, or not at all.
Across the wholesale network Lendmire works with, the structure looks the same from file to file. The lender looks at the property first, then the plan, then the borrower. That order is the opposite of a bank mortgage, which starts with your debt-to-income ratio.
| Factor | Hard money | Bank mortgage |
|---|---|---|
| Primary focus | Property, plan, exit | Borrower income |
| Income test | Minimal personal documentation | Debt-to-income ratio |
| Term | 6-18 months, interest-only | Long amortizing term |
| Rehab funds | Released in draws | Rarely included |
Hard money programs sit apart from rental financing. A hard money loan is a short bridge. A DSCR loan is long-term financing that qualifies primarily on property-level rental income covering the payment, subject to lender guidelines. Many investors use the first to buy and fix, then the second to hold. The complete DSCR loans guide covers that second half in detail.
The Requirements, Line by Line
Every requirement exists to answer one risk question. If you know the question, you can predict what a lender will ask for. The table below pairs each requirement with what to prepare when you have no business behind you.
| Requirement | What the lender checks | What to prepare without a business |
|---|---|---|
| Equity or cash in | Your stake in the deal | Personal bank statements |
| Leverage | Loan versus cost and ARV | A clear purchase price and budget |
| Credit | Payment history | A current credit report review |
| Experience | Completed projects | A one-page project resume |
| Exit plan | How the loan gets repaid | A written sale or refinance plan |
| Reserves | Cash after closing | Statements held apart from down payment |
| Property | Type, units, condition | Photos, scope of work, insurance |
Leverage tiers
Leverage on a fix-and-flip is measured against project cost, which is the purchase price plus the rehab budget. The tiers depend on documented completed projects. These figures are typical and vary by lender, property, and experience.
- 5 or more completed projects: up to 93% of project cost.
- 2 or more completed projects: up to 90% of project cost.
- Fewer than 2 projects: up to 85% of project cost.
Every tier is capped at 75% of ARV. Whichever number is lower controls the loan. Bridge purchases without rehab run up to 80% of purchase price. Cash-out and rate-and-term refinances run up to 65% of value on this product.
Up to 100% of the rehab budget funds in draws against completed work. That figure applies to the rehab budget only. It is not a purchase loan-to-value ceiling, and there is no true 100% purchase program. Anyone selling one is describing a structure where the investor still brings equity somewhere.
Credit
A 620 score is the typical minimum, with added conditions below 660. Underwriting stays asset-based, so a score does not replace a weak property or a thin plan. It does move the leverage tier you are offered.
Loan size and collateral
Loan amounts run up to $5,000,000, larger by exception, and smaller balances vary by lender. Eligible collateral is non-owner-occupied residential property of one to four units. Ground-up construction can run to ten units. Commercial, industrial, land or lots, hospitality, and owner-occupied property are not on the program sheet.
Terms
Terms run 6 to 18 months, interest-only, with no prepayment penalty. There are no multi-year options on the current program. An investor who needs a longer runway refinances into long-term rental financing instead.
Do You Need an LLC or a Business?
An LLC is common on hard money files, but a lender can often work with an individual borrower. Lendmire’s network treats the entity as conditional. If you close in an LLC or corporation, entity documents are collected, subject to program eligibility. If you close personally, that line of the checklist drops off.
Here is how the two paths compare.
| Item | Individual | LLC |
|---|---|---|
| Documents | ID, statements | Plus formation papers |
| Title | Held personally | Held by entity |
| Personal guarantee | Yes | Usually still yes |
| Setup work | None | Formation, EIN, bank account |
| Exit | Simple | Possible deed transfer |
The LLC does not remove the personal guarantee. Lenders underwrite the members behind the entity, and most ask the principal to guarantee the loan. So an LLC is not protection against this loan itself. It may help with liability from other sources, such as a tenant claim, which is a separate question for an attorney.
Timing matters too. If you plan to form an entity, do it before you sign the purchase contract. Changing the buyer name after the contract is signed can create problems. Newly formed entities have no operating history, so lenders lean on you personally: your credit, your statements, and your project resume.
Why “Business” Is About Purpose, Not Ownership
Lenders call these loans business-purpose loans. That label describes what the money is for, not whether you run a company. This is where many first-time borrowers get confused.
Regulation Z, as published by the CFPB exempts credit extended primarily for a business or commercial purpose. It also exempts credit extended to someone other than a natural person. Those are two separate paths. An LLC borrower takes the second. An individual buying a rental takes the first, because credit to acquire or improve non-owner-occupied rental property is generally treated as business purpose.
The network’s hard money product is for non-owner-occupied property only, and that is what keeps the files on the business side of the line.
A few edge cases are worth knowing:
- The checked box is not enough. The OCC’s examiner handbook on truth in lending notes that a business-purpose box alone may be insufficient evidence. That is why lenders collect a signed business-purpose statement and look at the deal itself.
- Business purpose is not a free pass. A Hunton law-firm paper makes the point that business purpose does not automatically mean compliance-exempt. Lenders carry that risk, which is one reason they ask for documents.
- Trusts get a closer look. A trust is not automatically treated as a business entity. Lenders review trust borrowers case by case.
- A refinance can change the label. If a business-purpose loan is replaced later by a loan made for personal purposes, the new loan is judged on its own purpose.
None of this is legal advice. The practical takeaway is simple: keep the use of funds clearly tied to the rental or flip.
Documents That Replace Income Paperwork
You will still hand over paperwork. It is just different paperwork. The lender wants proof that the property and the plan are real and that you can cover the gaps.
For a personal borrower, the usual set is:
1. Government ID and basic borrower information.
2. Signed purchase agreement, or property details for a refinance.
3. Scope of work and rehab budget, if the loan includes rehab funds.
4. Proof of insurance on the property.
5. Bank statements showing cash to close and reserves.
6. A short written exit plan.
7. A project resume, even if it is one line.
If you close in an entity, add the formation documents, operating agreement, and the member list. Each item answers a question. The purchase agreement proves the price. The budget proves the cost. The statements prove you can survive a delay. The exit plan proves the loan gets repaid.
Qualification here runs on the property’s value and equity cushion rather than personal income documentation. That is not the same as no documents. A thin file costs more time than a complete one, and gaps are a common reason files stall.
No Track Record? How a First Project Gets Presented
A first-time investor can qualify, but at the 85% of project cost tier, still capped at 75% of ARV. The top tiers are reserved for experienced investors. Plan to bring more cash than a veteran would.
Lenders trust a first-time file when the plan is specific. That means a line-item budget, a contractor with a written bid, a timeline, and a realistic ARV tied to nearby sales. Reserves matter more here than anywhere else. A lender reads strong reserves as proof that a cost overrun will not stall the project.
Here is a simple walk-through using percentages only. Say a first-time investor buys a property and plans a renovation. The loan is sized at 85% of project cost, so the investor funds the other 15% plus closing costs. The lender then checks the result against 75% of ARV. If the ARV is soft, the ARV cap controls and the investor brings more cash. Reserves come on top of all of it. This is an illustration, not a quote, and the actual numbers vary by lender, property, and experience.
The same borrower on a bridge purchase with no rehab faces up to 80% of purchase price, so cash in is closer to 20% before costs.
Where Files Stall or Get Re-Priced
Most problems come from the same short list. Each has a fix.
- Budget too thin. Lenders typically compare the budget with the property’s condition. Get a contractor bid and add a contingency line.
- ARV not supported. Pull recent comparable sales that match the finished product, not the current condition.
- Reserves mixed with the down payment. Statements should typically show reserves in addition to cash to close.
- Entity papers incomplete. An operating agreement with missing members can stall review.
- Credit surprises. Check your report before applying. A lower score may carry added conditions, subject to lender guidelines.
- Weak exit. Name the exit and the backup. A sale needs list-price logic. A refinance needs a property that may qualify for rental financing under the lender’s guidelines.
On that last point, many investors refinance out of hard money into long-term DSCR investor loans once the property is stabilized, and Lendmire brokers that path. Before you close the bridge loan, check how the future rental program treats title. A borrower who closes in an LLC and then needs to deed the property out of it should plan for that step.
Key Terms Defined
Loan-to-cost (LTC): The loan amount divided by purchase price plus rehab budget.
After-repair value (ARV): The estimated value of the property once the renovation is finished.
Draw: A release of rehab funds after the lender confirms that work is complete.
Personal guarantee: Your promise to repay the loan from personal assets if the property does not cover it.
Reserves: Liquid cash left over after the down payment and closing costs, held to cover delays and overruns.
Exit strategy: The written plan for repaying the loan, usually a sale or a refinance.
Who This Loan Does Not Fit
Hard money is the wrong tool in three cases. The first is a long-term hold with no rehab and no near-term refinance plan. A rental loan fits that better. The second is an owner-occupied purchase, which is outside this product. The third is a property type the program does not list, such as land, commercial, or hospitality. Investors in those situations should compare other products first.
Readiness Checklist
Before contacting any lender, confirm you can say yes to each of these:
- I know the purchase price and have a written rehab budget.
- I have an ARV supported by nearby sales.
- My credit report is current and I know my score.
- I have cash to close plus separate reserves.
- I can describe my exit in two sentences.
- I know whether I will close personally or in an entity.
Frequently Asked Questions
Do I need an LLC to get a hard money loan?
No, though many lenders prefer one. Across most programs, an individual can borrow if the loan is for a rental or flip, and entity papers are collected only when you close in an entity. Expect a personal guarantee either way. Requirements vary by lender and program.
Can I qualify with no experience?
Yes, at the lowest leverage tier. Fewer than 2 completed projects means up to 85% of project cost, capped at 75% of ARV. A detailed budget, a contractor bid, and strong reserves help a first file read as credible.
Does credit matter?
Yes. A 620 score is the typical minimum, with additional conditions below 660. Underwriting stays asset-based, so credit shapes the terms but does not replace the property and the plan.
Is income verified?
Personal income documentation stays minimal, and qualification runs on the property’s value, the equity cushion, and your exit. You still show bank statements, reserves, and the deal documents.
What happens if I cannot repay at the end of the term?
The lender can look to the property and, where a personal guarantee exists, to you. The better path is planning the exit early: a sale, an extension if the lender offers one, or a refinance into long-term rental financing.
If you are buying, rehabbing, or refinancing an investment property on a short timeline and want to see how the numbers work, Lendmire can help you compare hard money options based on the project, the exit plan, leverage, and your goals. Lendmire’s piece Can You Refinance Hard Money Without Showing Income? covers the next questions most borrowers ask.
About Lendmire
Lendmire (NMLS# 2371349) is a mortgage broker that arranges hard money and DSCR financing through select lenders in its wholesale network, across 41 markets including Washington, D.C. Lendmire does not lend directly, and nothing here is a commitment to lend. Programs change and every file is underwritten individually. Scotsman Guide named Lendmire a Top Mortgage Workplace in both 2025 and 2026.
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References
1. CFPB, Regulation Z § 1026.3
2. OCC Comptroller’s Handbook, Truth in Lending Act
3. Hunton, Beware of Business Purpose
This article is part of Lendmire’s hard money loan program — full qualification details, guidelines, and scenarios live on the program page.
Related reading: Hard Money vs Bank Loan Requirements for a Rental Purchase · Hard Money Bridge Loan Requirements for a 2-4 Unit Property · Hard Money Loan Proof of Funds Requirements for a Cash Offer
Brandon Miller
Founder & CEO, Mortgage Loan Originator, Lendmire LLC
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Disclosure information. Lendmire is a state-licensed mortgage brokerage under NMLS# 2371349. Lendmire is not a depository institution, direct lender, or financial advisor — all loans referenced are placed through wholesale lender partners and are subject to each lender's underwriting standards. This article is provided for general informational purposes and is not a commitment to lend, nor does it constitute financial, legal, or tax advice. Loan programs, terms, rates, and qualification standards change without notice and depend on borrower profile, property type, and the state in which the subject property is located. Equal Housing Opportunity provider. NMLS Consumer Access: nmlsconsumeraccess.org.