Private money lenders are non-institutional individuals or companies that provide short-term loans to borrowers for a variety of purposes. Working with a private money lender can offer several benefits, such as faster access to funds, more flexible loan terms, and a simplified application process.


Speed is one of the primary advantages of working with a private money lender. Unlike traditional lenders, private lenders can often provide funds in a matter of days rather than weeks or months. Private lenders typically have more flexibility in their loan terms too.

Another benefit of working with a private money lender is the simplified application process. Traditional lenders typically require extensive documentation and review processes that can be time-consuming and onerous. Private lenders, on the other hand, often base their lending decisions on the value of the collateral or the borrower's ability to repay the loan rather than on strict credit score requirements.

You may repay your Groundfloor Lending loan at any time. There is a three-month minimum interest required for prepayments within the first three months of your loan. After three months, there is no prepayment penalty.

Loans go into conditional approval, pending the borrower’s acceptance of Groundfloor Lending's terms and conditions. At the closing table, Groundfloor Lending will provide the initial disbursement of funds. Once the property has been purchased and the project begins, borrowers receive draws payouts in the form of draw requests from a Groundfloor Lending-held escrow account. Please note that draws are approved based on completed work. For a more detailed explanation of a loan’s lifecycle, please refer to our blog post on the subject.

Once you submit a loan application to Groundfloor Lending, a Groundfloor Lending representative will contact you to get more details about your project and discuss terms. Then, the loan moves through processing, wherein you submit all required documentation to your assigned Groundfloor Lending representative. Once this is completed, the loan moves into the underwriting stage before being cleared to close. You will receive communications and updates about the status of your loan from the Groundfloor Lending team, but you are always welcome to reach out to your dedicated Business Development Manager should you have any questions along the way.


Our Operations Team can typically close a loan application within 10-14 business days. We will advise upon review whether the application is complete, or if we need additional information to complete the application.

Groundfloor Lending generally charges borrowers between 2.75% and 4% of the principal amount of the loan in interest for underwriting the loan. Borrowers' points and fees are financed into principal loan amount at closing, and interest payments are deferred until the loan repays. Closing costs are a total of $1,250, plus an additional $495 application fee, which is paid at the time of application and covers the valuation costs.


Once the loan closes there may be additional fees for servicing the loan should the loan mature or go into default.