What is a hard money loan?

At its core, a hard money loan is an asset-based, short-term loan. Such loans are typically more expensive than those from conventional sources, which is why they are described as having "harder terms."  Borrowers often turn to hard money lenders for deals that a traditional lender is unable finance. The asset is the collateral, or security, for the loan. The asset most commonly associated with the term hard money is real estate, although there are other items or entities of value that can be collateralized. A hard money lender looks primarily to the collateral as the ultimate source of repayment rather than to the capacity or willingness of the borrower to repay the loan.