Why Borrowers Should Choose a Balance Sheet Lender in Private Lending
In today’s private lending market, it’s important to understand that not every “lender” operates the same way. Many so-called private lenders are really intermediaries. They originate loans, only to sell them to larger financial institutions that ultimately control the capital.
On the surface, this model might seem fine—you apply with a lender, get approved, and receive your funds. But for borrowers, there are hidden drawbacks that can make the difference between a smooth financing experience and a frustrating one.
The Problem with Loan-on-Sale Models in Private Lending
When a loan is sold to a bigger institution, you’re suddenly dealing with someone you never chose. The institution’s rigid credit box dictates whether your loan is approved. You’re forced to meet every tick-box requirement, often slowing down the process and making it harder to secure funding.
The bigger issue comes after funding. If anything changes during the life of the loan—whether you need an extension, a modification, or some accommodation—you may find yourself dealing with a faceless corporation. These institutions often have little incentive to work with you, and your relationship with the original firm disappears as soon as your loan is sold.
This is particularly problematic in hard money lending, where speed, flexibility, and direct communication are supposed to be the key advantages.
The Balance Sheet Advantage: F2 Finance
At F2 Finance, we take a different approach. We are a true balance sheet lender in the private lending space. That means:
Proprietary capital – We use our own funds, not outside institutions.
In-house credit decisions – We evaluate every deal ourselves, with no external credit box.
No loan sales – We retain every loan until maturity.
The result? Certainty and consistency for our borrowers. From origination to payoff, you know exactly who you’re dealing with—F2 Finance. If issues arise, you can come directly to us, and we’ll work with you to resolve them. That’s the advantage of a true relationship lender.
Why It’s Not Just About the Headline Rate
In the world of private lending and hard money loans, it can be tempting to focus on the lowest advertised interest rate. But smart borrowers know that the headline rate isn’t the whole story.
A slightly lower rate doesn’t help much if you end up stuck with a lender who sells your loan, leaving you to deal with an uncooperative institution. What matters just as much—if not more—is who you’re dealing with and whether you can count on them to stand by you throughout the life of the loan.f2
With F2 Finance, you’re not just getting a loan—you’re gaining a partner. We are a relationship lender, committed to being there for our borrowers at every stage, from closing to maturity and beyond.