Warehouse line cost calculator
A warehouse line advances only part of each loan, so you fund the rest (the haircut) with your own cash and pay interest and fees on the advance for as long as the loan is on the line. Enter your loan and line terms to see the cash each loan ties up and what you keep, next to placing the same loan whole with a capital partner.
On the warehouse line
| The line advances | $375,000 |
|---|---|
| Your cash in the loan (the haircut)Tied up for 180 days (about 5.9 months) | $125,000 |
| Line interest | $16,644 |
| Line fees | $1,688 |
| Borrower interest you collect | $27,123 |
| Origination points | $10,000 |
| What you keep, before your own costsInterest + points − line interest − fees | $18,792 |
| Annualized return on your haircut cash | 30.5% |
| Loans like this $1,000,000 of your capital can carry at once | 8 |
Placed whole with a capital partner
| Your cash in the loanThe partner funds the whole loan at closing | $0 |
|---|---|
| Placement fee (1%, $2,500 minimum), from the points | −$5,000 |
| Points you keep (after the placement fee) | $5,000 |
| Spread above the partner’s rate (180 days) | $3,699 |
| What you keep, before your own costs | $8,699 |
| Loans your capital can carry at once | Not limited by your capital |
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 to read the results
The haircut is the number most lenders underestimate. It is your own capital, sitting in the loan for as long as the loan stays on the line, and it decides how many loans your equity can carry at once. The line’s interest and fees then reduce what you keep from the borrower’s interest and points.
When a capital partner funds the whole loan at closing, you put no cash in the loan, pay no line interest or fees, and earn your points (less the placement fee) plus the spread between your note rate and the partner’s rate. You earn less interest per loan than on a line, because the partner earns most of it, but your capital no longer limits how many loans you close.
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.
Related terms
Advance rate · haircut · dwell time · warehouse line · table funding
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.