Private & Hard Money Exit Strategy The plan for paying off a short-term loan — refinance, sale, or new financing.
Private & Hard Money Fix-and-Flip Loan A short-term loan to acquire and renovate a property for quick resale.
Private & Hard Money Gap Funding Capital that fills the difference between a senior loan and the borrower’s available equity.
Private & Hard Money Hard Money Loan A short-term, asset-based loan from a private lender, typically at higher rates than banks.
Private & Hard Money Holdback Loan proceeds held in reserve and released as construction or rehab milestones are met.
Private & Hard Money Interest Reserve Loan funds set aside to cover interest payments during a rehab or construction period.
Private & Hard Money Lender Inspection A periodic site visit by the hard-money lender to verify construction progress.
Preferred & Tiered Funding Cap Table A spreadsheet showing all equity holders and their ownership percentages.
Preferred & Tiered Funding Convertible Preferred Preferred equity that can convert to common equity under specified terms.
Preferred & Tiered Funding Equity Kicker An equity participation added to a debt instrument as a return enhancer.
Preferred & Tiered Funding Hard Pref A non-cumulative preferred return that doesn’t accrue if unpaid.
Preferred & Tiered Funding Junior Tranche Lower-priority debt repaid after senior tranches, with higher yields.
