Avatar's Blog
» Investor Funded Lenders vs. Institutional Funded L
Avatar is a commercial hard money lender. We are institutionally funded. Other hard money lenders are investor funded. In general, the advantages of an insitutionally funded lender includes some of the lowest rates in hard money, fewer points, and the speed of lending. Institutionally funded lenders are already funded. They have made arrangement with institutions, such as banks, retirement funds, etc. to fund loans. The money is in the bank, as it were. Investor funded lenders have to develop a prospectus and float it to investors to collect/raise the money needed to fund a loan. This can take anywhere from a few minutes to several weeks. So institutionally funded lenders may be able to fund more quickly in some cases.
On the flip side, institutionally funded lenders might be described as 'near bank deal' lenders. At Avatar, we say, "If the bank almost said yes, we're your lender." Investor funded lenders may be more expensive and may take more time, but one can generally find an investor for almost any kind of risk, provided the return on investment is sufficient to make the risk worthwhile.
If you are looking for a hard money loan, try institutional funding for speed and rates. At Avatar, we can let you know within a couple of hours of receiving your loan package whether your loan is a good match for Avatar.
