As soft deposit financing has become more normative in the CRE space, soft deposit financing providers have become more important.
Investors and developers who are short on cash or are pursuing multiple deals need soft deposit financing providers that can supply consistent cash. They are especially needed in competitive markets where sellers prefer potential buyers who can quickly pay a soft deposit.
But which soft deposit financing providers provide the best value for investors?
In what follows, we consider five of them.
Duckfund
Duckfund is a commercial real estate funding company that was created by a Stanford alumna and is managed by experts with more than 15 years of experience in real estate. It provides soft deposit financing as well as equity and debt financing.
Best known for
Duckfund is best known for providing quick funding and supporting multiple simultaneous deals.
Key advantages
- Easy and fast application: The application process can be completed within a few minutes. This is because Duckfund does not request credit reports or collateral.
- Quick fund disbursal: Funds are sent to the escrow agent within 48 hours of a successful application.
- Flexibility: Duckfund allows you to negotiate higher soft deposits with sellers to gain a competitive advantage. If the stated rate is 10%, you can propose 20% and Duckfund will fund it.
- Competitive fees: Duckfund charges a competitive financing fee related to the deposit size for 30 days.
- No maximum amount: The minimum funding amount is $50,000, but there is no maximum amount.
Ideal for
Duckfund is ideal for investors in competitive markets and those who need large soft deposits.
Winchester Equities Co.
Winchester Equities Co. is a real estate investment firm that focuses on off-market real estate opportunities. In addition to equity and debt placement, they also provide earnest money financing for clients.
Best known for
Winchester Equities Co. is best known for its low fees and long financing term.
Key advantages
- Low financing fee: The option premium is just 2.5% of the deposit amount for 30 days. However, there are other fees (1.1% legal fee and 5% exercise premium) if you decide to close the deal.
- Long financing term: You can get funding for up to 90 days.
Ideal for
Winchester Equities Co. is ideal for investors targeting large projects, as the minimum financing is $500,000.
Truss Financial
Truss Financial is a private lender that provides soft deposits financing, proof-of-funds financing, bridge loans, and pre-receivables financing.
Best known for
Truss Financial is best known for the flexibility of its financing arrangements.
Key advantages
- Flexible time frame: There is no fixed term that Truss Financial supports. You can negotiate the details of every financing arrangement.
- Flexible fees: The fees are also variable, depending on your negotiation skills.
Ideal for
Truss Financial is ideal for investors who have good negotiation skills.
AdvanceDeposit
AdvanceDeposit is a financing company that focuses only on soft deposits for real estate investors.
Best known for
AdvanceDeposit is best known for its low fees.
Key advantages
- Flexible term: There is no stated limit to the financing term that AdvanceDeposit can support.
- Low fees: Its 1% financing fee per month is one of the lowest. However, there are legal and processing expenses with unspecified rates.
- Quick fund disbursal: They provide funds to the escrow within 72 hours.
- Wide range of funding amounts: The minimum amount is $50,000, and the maximum amount is $20 million.
Ideal for
AdvanceDeposit is ideal for investors seeking quick and low-cost soft deposit financing.
Green Valley Capital
Green Valley Capital (GVC) is a short-term financing company that provides soft deposit funding, gap funding, transactional funding, proof-of-funds funding, and escrow funds.
Best known for
GVC is best known for its flexibility.
Key advantages
- Low financing fees: Its 2.5% monthly soft deposit fee is low. However, there is an additional 2% monthly interest.
- Flexible financing amount and term: There are no minimum or maximum funding amounts, or a cap on the term.
- Fast approval: Applications are approved within 24 hours. However, it is not stated how fast funds are disbursed after approval.
Ideal for
GVC is ideal for CRE investors looking for flexible terms.
Final Thoughts
Duckfund is better at combining all the key advantages that investors are looking for.
They are flexible with funding amount (as long as it is more than $50,000) and term, while also allowing investors in competitive markets to pay higher EMD rates.
Duckfund’s financing fee is competitive, yet it does not charge other fees like GVC, AdvanceDeposit, and Winchester Equities Co.
Also, it combines rapid and easy application, quick approval, and fast funds disbursal.
