Which type of investors are typically involved in hard money loans?

Hard money loans are primarily associated with private investors or organizations. These types of loans are secured by real property and are characterized by their quick approval processes and higher interest rates compared to traditional loans. Private investors or organizations are often willing to provide these loans based on the value of the collateral rather than the borrower's creditworthiness.

Since these loans are primarily funded by private entities rather than large financial institutions or government programs, they tend to be more flexible and less bureaucratic. This makes them particularly attractive to borrowers who need immediate funds, such as real estate investors and those seeking to finance projects that might not qualify for conventional bank loans.

In contrast, institutional banks typically engage in standard mortgage loans with stricter lending criteria, government agencies usually provide loans under specific programs aimed at particular demographics or priorities, and agricultural cooperatives focus on supporting agricultural financing—none of which align with the purpose and function of hard money loans.