Investors often use “bridge loan” and “hard money loan” interchangeably, but they serve different purposes. Understanding the difference can save you thousands.
Bridge Loans
Bridge loans are short-term financing that “bridges” the gap between two transactions. Common scenarios:
- You’re buying a new property before your current one sells
- You need to refinance quickly while arranging permanent financing
- You’re purchasing at auction and need fast capital
Bridge loans typically have terms of 12-24 months with interest-only payments.
Hard Money Loans
Hard money loans are asset-based loans secured by the property itself. They’re used primarily for:
- Fix and flip projects
- Properties that don’t qualify for conventional financing
- Investors who need to close fast (7-14 days)
Key Differences
Purpose: Bridge loans solve timing problems. Hard money loans solve qualification problems.
Rates: Bridge loans typically carry lower rates since they’re less risky.
Term: Both are short-term, but bridge loans may offer longer terms.
Hard Hat Capital’s Bridge Programs
We offer two bridge options — Bridge Limited for experienced investors and our EXCLUSIVE Bridge Choice program with 30/40-year fixed terms, no experience required, and a minimum DSCR of just 0.80.