I have noticed lately some confusion in relation to the term “hard money.” The confusion stems from recent political debates. Anyone who is familiar with the recent arguments in regards to the debt ceiling and the gold standard, may have seen the term hard money. The term is not referring to a hard money loan or a hard money lender, rather in relation to a “gold-standard”. The gold standard, as we refer to it today, was called something different in the past. The original name for it was the hard-money standard. Once again this name has no reference to a private money or hard money loan. It simply means that the standard for currency is gold, or rather, something hard. Recent debates among the political parties like the new-era “Tea Party” support the ideas of returning to the hard-money standard.
Unfortunately the restoring of the gold standard term hard-money standard, has confused the google bots, and concurrently confused people seeking hard money loans. To reiterate, the term hard money is not a loan made in gold, or a standard of currency backed by gold. Hard money is a non-conventional loan made by lenders or investors which is generally backed by real estate collateral.