This is the hit a lender could reasonably expect to realize from the sale of the land in the event that the loan defaults and the property must be sold in a one- to four-month timeframe. This market price differs from a outlet cost appraisal, which assumes an arms-length transaction in which neither buyer nor seller is acting under duress.

The brains a borrower would pay that rate is to avoid looming foreclosure or a "quick sale" of the property. That could amount to as much as a 30% or extended discount as is accepted on Hard Money Loans decurtate sales. By taking a short term bridge or hard coin loan, the borrower often saves equity and extends his time to get his affairs in grouping to better manage the property.