The Rise of Private Lending in South Florida

In the past few years, private lending has emerged as one of the fastest-growing sources of real estate financing in South Florida. This has reshaped how investors, developers, and even individual buyers access capital. As traditional banks have tightened their underwriting standards, leading to lengthened approval timeframes, many borrowers are looking to private lenders, often referred to as hard money or direct lenders, for speed, flexibility, and deal certainty.

Private lenders are often able to fund loans in a matter of days or weeks, relying primarily on the value of the underlying asset instead of the borrower’s income or credit profile. This approach has proven especially valuable in short-term projects such as fix-and-flip transactions, bridge financing, and construction loans, where timing and execution often determine profitability.

South Florida’s continued population growth, luxury inventory, and steady influx of out-of-state and foreign capital have created a uniquely favorable environment for private financing. In many Miami-Dade and Broward submarkets, cash and privately financed deals now represent a significant portion of total transactions. As a result, private capital is no longer seen as a niche product, but rather as a core component of South Florida’s real estate ecosystem.

What Lenders Should Know

Typical private loan terms in 2025 range from 9%–12% interest with loan-to-value ratios up to 50-60%, depending on collateral and borrower strength. Deals often include origination fees, interest reserves, and shorter loan terms than conventional financing. For those considering becoming private lenders, disciplined structuring and due diligence are essential. Lenders should:

• Define their lending niche and build a reliable local network of appraisers, title agents, and contractors.
• Conduct thorough title, insurance, and legal reviews for every transaction.
• Use properly drafted and recorded mortgages, promissory notes, and related security instruments.
• Work with experienced Florida real estate counsel to ensure compliance with state lending and usury laws, as well as to protect enforceability in the event of default.

What Borrowers Should Know

Private lending can also benefit borrowers who require speed or flexibility unavailable through traditional lending, but these loans come with different obligations and risks. Borrowers should:

• Understand all terms, including fees, default provisions, and extension rights.
• Retain a Florida real estate attorney to review loan documents, verify lien positions, and negotiate favorable protections.
• Communicate transparently with lenders throughout the project to maintain trust and flexibility.

Private lending is primed to remain a key part of South Florida’s dynamic real estate market. Whether you are considering entering the lending space or exploring private financing for a project, partnering with knowledgeable legal counsel is an essential component for success.