Lender spread calculator
When a capital partner funds a loan you originate, you earn two things: your origination points (less any placement fee) at closing, and a yield spread for the life of the loan, the difference between the note rate you set and the partner’s agreed rate. Enter a loan to see both.
What you earn on this loan
| Origination points | $10,000 |
|---|---|
| Placement fee (1%, $2,500 minimum), from the points | −$5,000 |
| Points you keep, at closing | $5,000 |
| Your yield spreadNote rate minus the partner’s rate | 1.5% a year |
| Spread per year | $7,500 |
| Spread over 12 months | $7,500 |
| Total you earnPoints kept + spread over the term | $12,500 |
| As a yearly % of the loan | 2.5% |
| Your cash in the loan | $0 |
| Capital partner’s interest over the term | $50,000 |
Illustrative only. Default inputs are round, hypothetical examples, not market quotes and not any provider’s terms. Each capital partner sets its own rate. The placement fee follows Lender Capital’s published fee schedule: on table-funded loans up to $3,000,000, 1.00% (Preferred 0.75%); over $3,000,000, 0.75% (Preferred 0.50%) of the whole loan; on loan sales, 0.75% (Preferred 0.50%) of the purchased balance; $2,500 minimum. It is paid at closing from the origination points, only when the loan funds. Not financial, legal or tax advice.
How a lender earns on a placed loan
Points. The borrower pays origination points at closing. With Lender Capital, the placement fee comes out of those points only when the loan funds: 1.00% of the loan amount up to $3,000,000, or 0.75% of the whole loan above that (Preferred: 0.75% and 0.50%), with a $2,500 minimum. You keep the rest.
Spread. You set the borrower’s note rate. The capital partner receives its agreed rate, and the difference is your yield spread, earned while the loan is outstanding. On a $500,000 loan, each 1% of spread is about $5,000 a year.
What drives it. The partner’s rate depends on the loan’s risk and the partner’s own criteria, so the spread is a pricing decision: price the note with enough margin above the partner’s rate for the work you do, while staying competitive for the borrower. See how private lenders price a loan.
Assumptions
- Interest is simple interest on an actual/365 basis, interest-only, with the full balance outstanding for the whole period. No compounding, prepayment, default or taxes.
- Fees are what you enter. Real lines can also charge non-usage fees on the unused amount, audits, legal costs and minimum interest, which this calculator leaves out unless you add them to the fees.
- “What you keep” is before your own operating costs (staff, servicing, insurance) and before the cost of your own capital.
- A placed loan is funded whole by one capital partner at closing; the placement fee comes out of the origination points and is only paid when a loan funds.
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.