Hard Money Loan for Construction Job. How Much Return?

I have a construction guy that is doing some work for the state and he needs 10k to buy materials on some jobs. It will be approximately 4 months before I see that money again. What is the going rate that somebody would charge to make it worth their while to do the deal? I’m thinking I would need at least $2k extra in order to do this. Is that being unreasonable?

Thanks for your help.


Well $2k for a $10k loan for 4 months is about 60% per year interest which is more than I would pay but sometimes the contract profit is so large that the cost of money is inmaterial compared to the big picture.

Talk with this guy about a return that’s reasonable to you and see what you could work out.


Ok, so we agreed on the 20% number for 4 months. Anyone have a contract that would work that they could offer me? Also, would I be able to hold his tools, materials, and other work assets as collateral if the loan is not repaid in the timely manner that the contract states?