The term "hard money" refers to a type of loan that is secured by an asset, typically real estate. This means that if the borrower fails to repay the loan as agreed, the lender can seize and sell the property to recoup their losses. Hard money loans are often used in situations where traditional financing methods are not available or practical, such as for fix-and-flip investors who need funds quickly to purchase a property and make necessary repairs before selling it for profit. These types of loans typically come with higher interest rates than conventional mortgages due to the increased risk taken on by the lender.