Best Transactional Funding: What to Look For in a Lender

There is no single best transactional lender for every deal. There are lenders who fit your deal and lenders who do not. Use the questions below on any funder you are considering, including us.

A quick definition: transactional funding is a short-term loan that pays for your A-B purchase (seller to you) in a double close and is repaid from the B-C closing (you to your end buyer), usually the same day.

Is the lender direct, or a broker?

A broker passes your file to someone else's money. That adds a step, and on a same-day close every step is a chance for delay. Ask who actually wires the funds and who makes the yes-or-no call. Axelrad is a direct private lender on transactional funding: not a broker, not a referral.

Do they fund the full A-B purchase?

The point of transactional funding is that the purchase does not come out of your own pocket. Confirm how much of the A-B price the lender covers (less any earnest money already credited) and ask whether closing costs are included or left to you. Axelrad's transactional funding page has current terms.

What do they underwrite?

Same-day money is repaid by the end buyer, so a good transactional lender focuses on the exit: both executed contracts, the end buyer's verified funds and a title company ready for both legs. If a lender wants tax returns, entity seasoning or a high credit score for a loan that is out for hours, ask why. Axelrad does not pull credit, run background checks or require entity seasoning on transactional funding. More on that in transactional funding and credit.

What does it cost, and when is it due?

Ask for the total in dollars, not just a percentage, and ask when each charge is payable. Watch for application, processing or legal fees due before closing, and ask whether anything is withheld from the advance. Our post on transactional funding costs shows how to compare quotes.

Will they work with your title company?

Some funders require their own title company. That can force you to move a file you already opened. Ask before you commit. Axelrad works with one title company or two and never requires you to use ours.

Can they handle more than a basic A-B, B-C?

Real deals are messy. Ask whether the lender has funded stacked deals, Morby method or seller-finance structures, hold-backs, foreclosures and contracts that forbid assignment, and whether they fund MLS, REO and government contracts. These are all routine on Axelrad's transactional program, and it covers land deals too.

What happens if the B-C leg is delayed?

This is the question most investors skip. If the end buyer's lender is a day late, does the funder extend, or does the deal die? Axelrad offers delayed and extended options when the resale needs more than a day. Ask any lender what theirs are, in writing, before closing day.

Can they provide proof of funds for your offer?

Sellers and listing agents often ask for proof of funds before accepting an offer. Ask whether the lender issues a property-specific letter and how fast. Axelrad issues proof-of-funds letters for deals we are actually part of, after a person on our team reviews the request. Letters come back the same day, often within minutes to hours.

Will their money be there on the day?

Ask how the lender handles closings when its funds are committed elsewhere. A closing date the lender accepts should be a closing date they keep. Ask for that in writing.

Quick lender checklist

Key takeaways

• Judge lenders on certainty of the wire, not marketing claims about speed.
• Look for deal-based underwriting and a clear, written list of every charge.
• Get the total cost in dollars and confirm when each charge is payable.
• Make sure the lender works with your title company and has a written plan for a late B-C closing.
• Ask how the lender handles closings when its money is committed elsewhere.

Talk to Axelrad

Want to see how we answer these questions on your deal? Submit it through Axelrad's application and see the transactional funding page for current terms.