Difference between PML and HML...

[Virginia VanOeveren]

Since a lot of you are wondering the difference between PML and HML, here are my thoughts about it...

Private money lending and hard money lending both involve loans for real estate, but they differ in source and terms. Private money lending typically comes from individual investors or friends and family, often based on personal relationships and trust, and can have more flexible terms. In contrast, hard money lending usually comes from specialized lending firms or investors and focuses on the property's value rather than the borrower's creditworthiness, often featuring higher interest rates and shorter loan terms.

[Bobby Feinman]

@Virginia VanOeveren

Well said Virginia. Even though we do run credit and background, I refer to us as private money lenders rather than hard money lenders based primarily on the cost of capital. True asset based hard money lenders that do not consider the borrower's creditworthiness typically are a lot more expensive than we are.

So, to me, I usually tell people that the primary difference between PML's and HML's is cost of capital. Hope that helps.