Co-lending
Co-lending is an arrangement in which two or more lenders fund portions of the same loan, either side by side as co-lenders or through a lead lender that sells participations to the others.
How co-lending works
In a direct co-lending structure, each lender funds its share of the loan and is named on the loan documents, often with an agreement among lenders that sets out who makes decisions, who services and how payments and losses are shared. In a participation structure, one lead lender closes and owns the loan and sells undivided interests to participants under a participation agreement; the borrower deals only with the lead. Larger loans may be syndicated across several lenders.
The economics are set by the agreement: each party’s share, the rate it earns, any servicing fee or spread the lead keeps, and how decisions such as extensions or foreclosure are made.
Why it matters to a private lender
Co-lending lets you take loans bigger than your capital allows, or diversify by holding smaller pieces of more loans. It also adds coordination: shared control means slower decisions when a loan goes wrong, and the agreement should be clear before closing about who can act and how.
Whole-loan funding is the simpler alternative: one capital partner funds the entire loan, so there is no split ownership to manage. With Lender Capital, one partner funds each whole loan at closing or buys a whole loan the lender already funded; loans are sold whole, and participations are not offered. See sell your loans.
Example
Hypothetical. A $2,000,000 construction loan is funded 50/50 by two lenders. The lead services the loan and keeps a 0.5% servicing spread on the partner’s half under the participation agreement.
Compare the structures in participations vs. whole loans vs. note on note.
Where Lender Capital fits
Lender Capital places first-lien, business-purpose real estate loans with capital partners. You apply once, then submit each loan with the full file. We send it only to capital partners whose criteria it fits, one partner funds the whole loan at closing and it is assigned to them. You keep your points (less the placement fee), earn the spread above the partner’s rate and service the loan. You pay a placement fee only when a loan funds.
Lender Capital is a business-to-business platform. This page is general information, not legal, tax or securities advice. Terms of warehouse lines and other funding sources vary by provider; confirm them with each provider and your counsel.