Why Hard Money Loans?#
Real estate investing is one of the most effective ways to build wealth, but securing the right financing can be a challenge. Traditional bank loans often come with long approval times, rigid requirements, and limited flexibility—none of which are ideal when speed and adaptability are crucial.
That’s where hard money rehab and construction loans come in. These fast, flexible loans provide real estate investors with the capital needed to acquire, renovate, or build properties without the delays and restrictions of conventional financing.
Whether you’re flipping a distressed property or starting a new construction project, understanding how these loans work can be the key to unlocking your next profitable investment.
What Are Hard Money Loans?#
Hard money loans are short-term, asset-backed loans from private lenders like Cetan Funds. Unlike traditional financing, which relies heavily on a borrower’s credit score and financial history, hard money loans are secured primarily by the value of the property itself.
Real estate investors commonly use these loans for:
- Fix-and-flip projects
- New residential construction
- Rental property acquisitions
- Commercial developments
- Land acquisition and development
Among the various hard money loan options, rehab loans (fix-and-flip loans) and construction loans stand out as essential tools for investors looking to scale their businesses quickly.
How Hard Money Rehab Loans Work at Cetan Funds#
Rehab loans—also known as fix-and-flip or fix-and-rent loans—provide financing for purchasing and renovating distressed properties. These loans allow investors to make necessary improvements and either sell the property for a profit or rent and refinance the property to hold long-term.
At Cetan Funds, our rehab loans can cover:
- Up to 90-95% of total project costs
- Up to 70-75% of the property’s after-repair value (ARV)
Key Benefits of Rehab Loans:#
- Cover purchase and renovation costs
- Designed for distressed or undervalued properties
- Quick funding to help investors stay competitive
- Loan amounts may be based on the after-repair value (ARV)
Please note: final loan terms vary depending on many factors including the property location, property type, borrower qualifications, etc.
How Hard Money Construction Loans Work at Cetan Funds#
Fix-and-flip projects aren’t the only way investors use hard money. Cetan Funds also provides construction loans tailored for builders and developers looking to finance new projects from the ground up.
Our construction loans also offer:
- Up to 90-95% of total project costs
- Up to 70-75% of the finished property’s projected value
- Short-term financing (6–18 months)
Construction loans are similar to rehab loans but entail a larger construction credit line which is advanced gradually as the work is completed. Another important difference is that construction loans require approved plans and permits before our funding can be secured. So, typically a builder/developer would need to go through their planning and permitting process before closing on a construction loan. In that case, the construction can potentially reimburse some of the costs incurred by the borrower to get the project to that point.
Key Benefits of Construction Loans:#
- Designed for new builds, from single-family homes to multi-unit developments
- Loan amounts may be based on the completed property’s projected value
- Funds disbursed in draws and interest is only charged on funds drawn
Please note: final loan terms vary depending on many factors including the property location, property type, borrower qualifications, etc.
Understanding Construction Holdbacks#
A crucial part of construction loans is the draw process, where funds are disbursed as work is completed.
Common Questions About Construction Holdbacks:#
Why do lenders hold back funds?
Lenders release funds gradually to protect their investment, ensure project completion, and confirm funds are being used appropriately.
How does the process work?
Borrowers receive an initial portion of the loan, with the remaining funds held back for construction. As work is completed, borrowers request additional funds through a structured draw process.
How do draw requests work?
Borrowers submit draw requests—typically up to twice per month—including a breakdown of costs, proof of work completion, and invoices over a certain amount depending on the project. At Cetan Funds, we process draws within 24–48 hours if we get everything we need, ensuring funds are available quickly. We can wire funds or even cut checks to the borrower or directly to their contractors in certain situations.
The Cetan Funds Advantage#
Cetan Funds is a pooled private equity fund. As a direct lender, we manage the entire loan process in-house—eliminating unnecessary delays and middlemen. Our expertise in short-term financing for land purchases, development, new construction, and rehabs has made us a trusted partner for real estate investors throughout Oregon and Southwest Washington.
Why Investors Choose Cetan Funds:#
- Fast Approvals & Funding: Loan decisions within 2–4 business days, with funding available in as little as 7 days.
- Locally Managed, Direct Lending: No loan brokering or reliance on Wall Street funding—everything is handled in-house.
- Flexible Loan Terms: We tailor financing solutions to fit each investor’s unique needs.
- Interest-Only Payments on Drawn Funds: Lower carrying costs and better cash flow management.
- More Secure Funding Model: Our pooled fund structure ensures stability and mitigates risk.
- Long-Term Relationships: Many of our clients return for multiple projects, benefiting from consistent, reliable funding.
- No Fees for Construction Draws: Unlike many lenders, we don’t charge extra fees for accessing your construction funds.
Build Wealth Through Real Estate with Cetan Funds#
Whether you’re a real estate investor, homebuilder, or contractor in Oregon or Southwest Washington, we’re here to help finance your next project.
Contact us today or visit our Loan Programs page to learn more about how our hard money rehab and construction loans can help you grow your portfolio and maximize returns.
BORROWER FAQs#
What is a Private or Hard Money Loan?
Private and hard money loans come in many variations, but most are short-term loans provided by an investor or group of investors when conventional financing is unattainable or undesirable.
Most private lenders and hard money lenders, like Cetan Funds, finance projects like fix and flip rehabs, rental properties, commercial bridge loans, land development, and many other unusual or unconventional properties and projects. A private or hard money loan can help real estate investors, developers, builders, and small businesses grow their portfolios and businesses faster than they could on their own.
Here at Cetan Funds, we empower people to build wealth through real estate.
Why choose hard money vs. bank loans?
Hard money (or private) loans are built for speed and flexibility. Banks often require months of paperwork, strict borrower qualifications, and rigid underwriting standards. At Cetan Funds, we base our lending decisions primarily on the value and potential of the property, not just the borrower’s financial profile. This means we can finance properties and projects banks typically decline due to condition, complexity, or unusual circumstances.
Hard money loans are ideal for time-sensitive opportunities like fix-and-flip projects, new construction, or land development.
Where Does the Money You Lend Come From?
Cetan Funds offers two pooled private equity fund investments for Oregon residents who qualify and accredited investors. Our two funds, called Cetan Income Fund and Cetan Opportunity Fund, serve as the primary source of capital for the loans that Cetan Funds originates.
Rather than matching individual investors to individual loans, or borrowing capital from banks or Wall Street as many hard money lenders do, at Cetan Funds, we manage our own pool of funds. The investors own shares of their fund limited liability company and the principals of Cetan Funds manage the portfolio of loans owned by the fund. All loans are serviced by Cetan Funds. To learn more about the advantages of this structure, please contact us.
What Types of Loans Does Cetan Funds Finance?
We can lend on most commercial and residential property in Oregon and SW Washington if the loan is for business or investment purposes. We provide short-term financing for bare land, land development, new construction, rehabs, and residential and commercial bridge loans.
Do You Lend on Primary or Secondary Residences?
No. We can only lend for business or investment purposes and do not lend on owner-occupied residential properties. Check out our blog to learn more about what we do and what we don’t do.
Where Do You Lend?
We lend exclusively in Oregon and SW Washington because we know the market well and are committed to helping grow our local market. We lend primarily in Western, Southern and Central Oregon with an occasional loan in Southwestern Washington.
Do You Only Look at the Property/Collateral?
While we are primarily a “collateral-based lender,” we do not solely look at the property/collateral. In our experience, who you lend to is just as important as what you lend on.
We strive to build long-term relationships with our borrowers, and we cannot achieve that if we focus solely on their real estate. So, we also take into consideration character, capacity, capital, and other conditions.
Weighing these important factors, which are often overlooked by other private and hard money lenders, helps us accurately measure risks for both our borrowers and our investors while allowing us to offer better all-around results for our clients.
Do You Have Minimum or Maximum Loan Sizes?
How Long Are Your Loans?
We offer loans as short as 3 months and as long as 60 months; however, most of our loans are for 6 to 12 months. Plus, we build in automatic extensions to every loan to ensure borrowers have time to deal with unexpected events and circumstances.
What Are Your Application and Underwriting Requirements?
Cetan Funds loans are customized to fit each specific scenario. Therefore, application and underwriting requirements can often vary depending on the situation. Typically, we require the following:
For Applications:
- Cetan Funds Business Loan Application (online form, link provided by your loan officer)
- Personal financial statements for all loan guarantors (form provided)
- Property/project description
- Summary of construction or investment experience (if applicable)
For Underwriting:
- 2 years of tax returns for all loan guarantors
- 3-6 months of bank statements
- Project/property-specific documentation (such as purchase/sale agreements, lease agreements, business financials, etc.)
- Detailed rehab or construction plans and budgets (if applicable)
Please contact us for more information on the application and underwriting requirements for your specific scenario.
How Fast Can I Get a Loan Decision?
How fast is funding?
We pride ourselves on moving quickly. Loan decisions are typically made within 1–2 business days, and pre-approval can often be issued just as fast. Once approved, we can close and fund in as little as 3–5 business days, depending on the project and documentation. That speed lets you secure capital and act on opportunities without the delays common with traditional lenders.
Can I Get Pre-Approved?
How Fast Can You Fund and Close a Loan?
As quickly as 3-5 days.
What is Your Minimum Down Payment?
What Are Your Interest Rates?
Rates vary depending on the project. Typically, annual interest rates are 10-12%. Interest is only charged on the outstanding balance. Therefore, interest is not charged on construction or rehab funds until they are drawn. So, for most of our short-term construction and rehab loans, borrowers actually incur far less than 10-12% in interest expense. For more information, please contact us.
What Are Your Loan Fees?
Origination fees vary depending on the project. Typically, origination fees are 2-4% of the loan amount. We also charge a $995-$1,495 administrative fee at closing.
Can I Live in the Property While I Have This Loan?
Unfortunately, no. Our borrowers cannot live in the residential properties we finance for them.
The only exception is in very specific commercial loan scenarios. If you wish to get a loan on a property you would like to live in now, or in the future, please contact us so we can help you find a lender for that. We are happy to help.
Can I Pay Off My Loan Early?
Do You Fund Rehab and Construction Loans?
On Rehab or Construction Loans, Do You Charge Interest on the Full Loan Commitment?
No. Interest is only charged on the outstanding balance.
How Do Construction Draws Work With Your Loans?
Construction draws are typically disbursed for work completed, materials purchased, or subcontractor invoices ready to be paid. Borrowers work directly with their loan officer, their main point of contact from start to finish on the project, to submit draw requests up to twice per month.
We do not charge fees for construction draws. Draw requests include a breakdown of the items awaiting reimbursement or payment, evidence showing the completed work or materials on site, and copies of subcontractor invoices or receipts over $2,500-5,000. Draws are typically processed in 24-48 hours.
Do You Fund Loans on Bare Land?
Yes, we provide bare land loans. Each situation is different. Please contact us for details.
Do You Finance Mobile or Manufactured Homes?
What is “Cetan”?
Cetan comes from the Lakota language and means “hawk spirit.” We chose it to represent the values we bring to lending: vision to see opportunities, loyalty in building long-term relationships, and speed in delivering funding when it’s needed most.
Supporting local organizations like the Cascades Raptor Center also helps us honor that connection to hawks and our beautiful raptors in the Pacific Northwest while giving back to the community.