There is still money available to get deals done; however, it may be more expensive.

Have you tried to secure private money for your deals recently? There’s a lot going on in the current lending landscape that is important for you to understand.

Let’s dive into some current industry trends, what’s happening in the overall marketplace, and some forecasts for the next few months. Crystal balls are often murky, however, so proceed with caution when it comes to predictions.

Big Players Exit or Consolidate

To understand the current lending landscape, let’s focus on a couple of large moves in the industry: PeerStreet and Civic Financial.

PeerStreet bankruptcy. PeerStreet was formed to raise capital from people, or peers (hence, its name), and then lend to others, all in return for an investment. On June 27, 2023, PeerStreet filed for Chapter 11 bankruptcy, revealing an astonishing number: More than 50% of its portfolio was nonperforming loans. To put that in perspective, for every two loans PeerStreet bought, one loan was not performing. PeerStreet won’t be alone in the coming months—the interest rate environment lends itself to uncertain times.

Civic Financial sold to ROC 360. Civic Financial, once the darling of PacWest Bank, was another casualty of the interest rate environment. Unfortunately, PacWest packed its balance sheet with Civic’s loans at the same time superregional banks such as PacWest were feeling the strain caused by the exodus of depositor funds. That forced Civic to be put up for sale. ROC 360 ended up buying Civic for an undisclosed amount.

What Does This Mean for Private Lending?

Numerous consolidations have occurred at the top as underlying business models have been challenged, as noted in each of the two previous examples above. What this means is traditional balance sheet lenders or mortgage fund operators have tremendous opportunity (and funding capability for you) to obtain more of the market share, which previously was being dominated by these larger players.

Who Will Do My Deal Now?

If there is any silver lining, it’s that plenty of local funders are still willing do your deal, if you look hard enough. PeerStreet and similar entities have vanished, but the void is being filled by traditional private lenders who have balance sheet control over their funds (either via personal wealth or through investors and/or mortgage funds).

Some lenders have said they have the pick of any deal they want to do because of the vacuum of capital in the space. This makes sense because there has been significant disruption in the banking model. Silicon Valley Bank, First Republic Bank, Signature Bank and many similarly situated banks have either failed or floundered enough to become unreliable sources of capital.

How to Find Your Local Lender

You may not have fingertip access to your local private lender, but they are around. If you’re not familiar with any local lending associations, the biggest and oldest trade association for private lenders is American Association of Private Lenders ( Use the filters on the website to sort through their members; you’ll likely find one to fund your deal.

Where Is Lending Headed?

Great question. We know where we’ve been, but where are we headed? To get a good sense of that, we should follow the data, understand what it means, and use it to predict where we’re going.

Follow the Data

To get a good sense of where lending is going, I turned to my partner in Geraci, Nema Daghbandan. He is the CEO of Lighting Docs (, our document generation platform that does in excess of $1 billion in loan documents each month. The second quarter of 2022 was by far private lenders’ best quarter. That’s not a huge insight, because we all know what happened in third quarter: Interest rates rose rapidly, constricting the flow of capital, private lending notwithstanding.

“What we saw is that even the latest quarter, Q2 of 2023 is still 24% down for bridge lenders from the second quarter of 2022,” Daghbandan said with regard to the data Lightning Docs possesses.

What Does That Mean?

Although the bridge lending space is down 24%, it doesn’t parse the data in specific enough detail. The bigger players, aggregators, and capital providers in the space are significantly down. Private lenders with balance sheet control have the ability to lend and are closing that gap, but since they will naturally be smaller, they are unable to completely close the bridge lending gap.

Where Are We Going?

We are headed very shortly to the “new normal.” Although current interest rates look ridiculously expensive, historically they are average. When interest rates stabilize, concern will turn to what, if any, downturn will occur in real estate .

We have two very competing data points. On one hand, we have a rising interest rate environment that will continue to contract capital and, on its face, should make prices of items, including real estate, decline. On the other hand, more than 90% of homes have an interest rate under 6%. This should reduce the mobility of people who would rather keep their current interest rate rather than opt for what they can get currently.

So, we will see either a reduction in the increase of real estate values across a lot of segments, or there’s a possibility of a much smaller correction than anticipated.

There is still plenty of money to get bridge deals done. Although the larger capital aggregators may be merging or going out of business, private lenders with balance sheet control should be willing to lend on your deals. They may be more expensive, but the deals will get done.

If I can help you in any way, please reach out to me or anyone at Geraci.

Categories | Article | Funding
  • Anthony Geraci

    Named to the 2022 Southern California Super Lawyers® list, a designation given to only 5% of attorneys, Anthony Geraci, Esq., is the CEO and a partner at Geraci, in charge of firm strategy and development of Geraci’s team and culture. He is an avid public speaker and strives to provide peace of mind to his employees as well as to all Geraci clients nationwide. On the legal side, Mr. Geraci is skilled in mortgage lending and securities law and has authored numerous articles on real estate finance and security subjects. He is a leader in creating national mortgage pools and mortgage funds as well as sophisticated net branching arrangements among several mortgage companies. He currently manages our Litigation team and is always searching for ways to bring more value to Geraci’s clients. On the professional development side, Mr. Geraci serves as a mentor to the various legal and media departments, spearheading problem-solving and growing his employees. In 2018, he authored the book Earning Money While You Sleep and is passionate about coaching other lawyers to perform to the best of their abilities. In his free time, Mr. Geraci is a coach for his son’s baseball team and is a founding member of EO (Entrepreneurs Organization) Inland Empire. In addition, he is a pilot who enjoys putting his private pilot license to use by exploring the skies over California, and he plans to one day have flown over the entire United States.

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