Kim Lisa TaylorSecurities Attorney, Founder, Syndication Attorneys, PLLC · Corporate Securities Attorney, 2x Best-Selling Author, Nationwide Speaker | Private Placement

Hard Money Loan Basics: Terms & Target Returns

1 Mar 2025 · 1 min

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In this brief dialogue, Speaker A outlines the current hard‑money lending environment: a headline interest rate of 13%, with investors receiving a 12% return and a 1% servicing fee retained by the lender. When asked about baseline loan terms, Speaker A explains that standard loans run for 12 to 24 months and are interest‑only. An exception is described for loans tied to property sales where the property generates no income; in such cases the lender may forgo the regular interest and instead target an overall generated return of roughly 20% on the deal.

Current interest rate right now is 13%. Investors get 12%. We get 1% servicing fee.
What are your baseline terms?
Oh, yeah. So our loans are 12 to 24 months. They're interest only. And, you know, there are some exceptions. So there are loans like if we make a loan to somebody trying to sell a property and there's no income in the property, We may instead of— we may forego the current interest and take a— usually we're looking for generated return of about 20% on those type of deals.
So you're like— so those are like a participation loan where you get