There are times when getting your client’s project funded turns into a challenging task. Maybe the money market is tight, private investors are conservative, or the project doesn’t fit conventional lending criteria. When this scenario arises, it’s valuable to have additional sources of working capital available to meet the needs of your brokerage clients. With advancements in real estate financing technologies and online funding platforms, there is much greater opportunity available. The global network of capital provides a rich resource to secure the funding that will provide the value to your clients needed to achieve your brokerage goals.
Working Capital for Brokerage Clients
Every project is unique, but not every finance partner will see and appreciate the value and potential that it represents. Even projects that are clearly suitable by all objective criteria can face financing challenges. This depends on market conditions, the availability of capital, and the networking reach of your clients and brokerage. In these instances, it’s beneficial to seek a lending partner that can bolster your reach. It will help you obtain the capital needed to carry these projects forward. If your brokerage meets overall volume criteria, there is excellent potential to access working capital through online funding platforms. Consider those that specialize is high-value and time-sensitive real estate development projects.
Going forward with this approach, it’s important to properly qualify your clients and gather the needed financial documents. Sometimes the need for alternative capital sources isn’t driven by the factors previously mentioned, but by the client’s need for expedient working capital to meet project milestones on schedule and keep holding costs to a minimum. Conventional financing sources typically take months to close transactions. They also have complex and tedious underwriting requirements that can sideline projects with excessive construction delays. Crowdfunding can provide financing solutions to meet diverse investor needs including working capital, bridge funding, construction loans, cash out, and more.
Benefits for Your Brokerage
Working with an online real estate investment platform to supplement your funding needs can offer tremendous benefits. One of the most significant benefits are referral fees that you’ll earn when bringing new clients to the platform. You’ll continue to earn referral fees on all subsequent loans originated for that client. What’s more is you will retain exclusive control of your relationship with your client and over your autonomous brand as a brokerage. A reputable financing partner will respect the time and effort you put into building the rapport and trust needed to secure a loyal client.
Another benefit of forming a financing partnership is that it will allow you to service a broader range of clients and provide them with a supply of unlimited potential capital. This will help build your firm’s reputation, profits, and marketing advantage. Online funding platforms offer tailored solutions, whereas most conventional lending institutions are bound by rigid bureaucratic policies and underwriting criteria. These dynamic solutions help meet the strict timelines of high-value real estate development projects. Additionally, much lower interest rates are available than through comparable private money sources.
Streamlined Underwriting and Lending Support
When you choose to work with a reputable and flexible funding platform, you’ll have access to convenient online tools. These will allow you to submit applications, track clients, manage documents, and ensure a smooth closing. Your lending partner can relieve you of underwriting duties and allow you to focus on developing client relationships and refining your marketing strategies. Rather than continuously searching for private capital sources, those with excessive rates and complex terms, you can rely on a stable source of financing that provides additional revenue and lead generation opportunities.
After solidifying the partnership by agreement and establishing online underwriting systems access, you’ll be ready to harness the vast capital that online funding platforms can provide. In addition to lending as a first position lien holder, alternative vesting is also available. Subordinated debt and equity shares are additional options. The flexibility is there to meet the unique needs of your clients. After you submit your client’s application, a risk profile assessment is developed. Upon approval, pre-funding of the project will get your clients the working capital they need. This will ensure they can move forward with their real estate development projects on schedule.
Working with a crowdfunding platform to supplement the lending capital available to your brokerage can create tremendous benefits for your clients. This is true in terms of financing costs, closing speed, and referral fee opportunities. Carefully review the terms and operational stability of the partners you consider working with. No matter which funding solution you select, ensure that you maintain control over your clients and business.