What Is Transactional Funding and How Does It Work?

Transactional funding is a short-term loan — typically lasting 24 to 48 hours — used by real estate investors to fund the first leg (A-to-B) of a double close transaction. The loan is repaid automatically when the second leg (B-to-C) closes, usually on the same day.

Why Do Wholesalers Need Transactional Funding?

In a traditional wholesale deal, the investor assigns their purchase contract to an end buyer and collects an assignment fee. But in some states, assignment restrictions or buyer objections make this difficult. A double close solves this by having the wholesaler actually purchase the property (A-to-B) and then immediately resell it (B-to-C).

The problem? Most wholesalers don't have the capital to purchase the property, even for a few hours. That's where transactional funding comes in.

How the Process Works

1. Submit your contracts. You provide your A-to-B purchase contract and your B-to-C resale contract to the transactional lender.
2. Get approved. The lender reviews your deal — not your credit score. Approval is based on the strength of the contracts and the closing timeline.
3. Funds are wired. Capital is sent directly to the title company or closing attorney handling your A-to-B transaction.
4. You close and repay. When your B-to-C buyer closes (usually the same day), the transactional loan is repaid from the proceeds. You keep your profit.

What Does Transactional Funding Cost?

Fees typically range from 1% to 2.5% of the A-to-B purchase price. At Lobeling Capital, our fee is a flat 1% with no upfront costs, no monthly payments, and no hidden charges.

Who Qualifies?

Unlike traditional lending, transactional funding doesn't require credit checks, income verification, or a lengthy application. The deal itself is the collateral. If you have signed contracts and a scheduled closing with a licensed title company, you can likely qualify.

When Should You Use Transactional Funding?

• When your end buyer objects to assignments
• When you're wholesaling in a regulated state (like Illinois or Oklahoma)
• When you want to protect your spread by keeping the A-to-B price confidential
• When you need to close fast and don't have capital sitting idle

Transactional funding lets you scale your deal flow without tying up personal capital. It's the engine behind high-volume wholesaling.