Real estate deals often stall when funding falls short. Gap financing offers a solution, covering shortfalls between your primary loan and total project costs. This strategic approach is essential when traditional funding sources fall short, ensuring projects continue to move forward and equity remains intact.
Real estate investors who understand gap financing can maintain momentum, stay on budget, and improve ROI. At Groundfloor Lending, our short-term loan options help fill funding gaps fast. Learn how gap financing works, when to use it, and how hard money lenders make it possible.
Gap financing refers to short-term real estate loans that cover the difference between your main source of capital and your total project cost. Common funding gaps include:
Rather than halting progress or rushing to sell equity, investors often turn to gap financing, a form of bridge loan designed to cover shortfalls between what conventional lenders offer and what your project actually needs.
Gap financing provides capital at critical moments. Without it, investors risk project delays, missed market opportunities, or budget overruns. Hard money lenders like Groundfloor offer fast, flexible solutions that align with construction and acquisition timelines.
By plugging the gap, you protect your equity and reduce risk. Whether you’re finalizing a fix and flip project or completing renovations, these loans keep things moving when timing matters most.
Hard money lenders are uniquely positioned to support short-term financing needs. Benefits of using hard money for gap financing include:
Groundfloor Lending provides gap loans without monthly payments. Interest accrues during the loan term, helping preserve cash flow while keeping your project on track.
Gap financing through hard money follows a streamlined path:
Unlike traditional lenders, hard money providers focus on the asset. This approach accelerates timelines and reduces documentation requirements.
At Groundfloor, gap loans generally include:
Whether you're refinancing with conventional loans or preparing to sell, these terms support short-term project goals.
Like all real estate financing options, gap financing involves risk:
A well-defined project scope, timeline buffers, and conservative financial models can help manage these risks.
Smart investors mitigate gap loan risk by:
To improve your odds of approval:
Planning a build? Our Construction Financing 101 guide explains how to align your timeline, draw schedule, and budget with the right short-term financing structure.
Not every lender specializes in gap financing. To find the right one:
The right lending partner understands your goals—and helps you get there faster.
Gap financing is a short-term loan that fills the gap between your primary financing and total project cost. It helps real estate investors cover shortfalls and avoid project delays.
Hard money lenders like Groundfloor offer gap financing based on property value, not personal income. This results in faster decisions and more flexible terms.
Groundfloor gap loans are typically 6 to 18 months with deferred interest and no monthly payments, with rates starting at 9.99% with LTVs up to 75%.
Most loans close within 7–14 days. Our streamlined application avoids traditional income documentation, speeding up approvals.
Risks include higher interest costs and short repayment windows. You can manage them with solid planning, buffer room in your schedule, and a defined exit strategy.
When conventional funding stops short, gap financing helps investors stay on track. With the right strategy (and the right hard money lender) you can turn shortfalls into opportunity.
Gap financing works best when integrated early in your real estate investment plan. From funding short-term flips to navigating market conditions, Groundfloor Lending offers short-term financing built for investors.
Have questions about your next move?
Connect with our team to explore your gap financing options and get personalized guidance for your next real estate project.