Table Funding for Private & Hard Money Loans

What is Table Funding?

Table Funding in private hard money lending is the use of another person’s or company’s capital to fund a loan at closing. It’s a popular capital method used by many private and hard money lenders to fund investment property loans. In most table funded transactions, the loan originator underwrites and processes the loan, but they don’t need to use their own money to fund the loan. When the loan is ready to close, the capital provider wires the funds into escrow or settlement.

This may seem like loan brokering, but one of the key differentiators with table funding is the loan originator maintains the relationship and communication with the borrower throughout the loan term. Other terms used to describe table funding include “correspondent lending” and “wholesale lending”.

In most cases, the borrower does not know where the money is coming from. The entity that funds the loan will likely have a generic name which hides the identity of the capital provider. Some loan originators will name themselves as the lender on the loan documents, but they’ll immediately assign the note to the capital provider at closing. This practice is prohibited in a few states, including California. The regulators in California require originators to disclose who is actually funding the loan, and who will hold the deed of trust securing the debt.

Read Our Guide About Table Funding