Bid-ask spread (notes)
In a note sale, the bid is the price a buyer offers, the ask is the price the seller wants, and the bid-ask spread is the gap between them. A sale happens when the two meet.
How the spread closes
A seller sets an ask from the loan's note rate, balance and quality. A buyer bids from the yield it needs and what it finds in the file. The spread narrows when the file answers the buyer's questions (payment history, valuation, title, draws), when several buyers look at the same loan, or when one side moves on price or terms such as servicing.
Why it matters to a private lender
A wide spread usually means the buyer sees risk the seller doesn't price, or the asking price is above what the note rate supports. A complete, clean file is the cheapest way to close the gap.
On Lender Capital
You set an asking price as a percentage when you submit a loan for sale; the final price is the one you and the buying capital partner agree. On Lender Capital, private and hard money lenders sell whole, first-lien, business-purpose loans they originated and funded, performing or not (no seller-financed notes or land contracts): a capital partner buys the entire loan and the sale settles through an escrow agent. Lender Capital never lends or buys loans with its own money. See sell your loans.
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.