LOAN PROGRAMS

RCN Capital offers short-term and long-term financing options for real estate investors. Whether you or your clients are looking to fix & flip properties or hold properties for rental income, RCN has flexible options that suit your needs.

Final loan terms may vary based on loan types, verification of application information, and other risk-based factors.

PARTNERS

RCN Capital values building strong partnerships with industry professionals because partnerships drive our success. Learn more about RCN Capital’s Wholesale Lending opportunities, including the Broker Referral Program and the Correspondent Lending Program.

ABOUT

RCN Capital is a nationwide private, direct lender. Established in 2010, we provide retail and wholesale lending options for short-term fix and flip financing, long-term DSCR financing, and ground-up construction financing for real estate investors.

Resources

RCN Capital provides a variety of resources that can help you on your lending journey. Find business partners that can help solve any investing problem, learn more about our processes and get answers to the most frequently asked questions.

The Impact of Interest Rates on Private Lending: What Brokers Need to Know


The Impact of Interest Rates on Private Lending: What Brokers Need to Know
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Interest rates are a driving force in the real estate market, influencing everything from borrower demand to lender profitability. For brokers, private lenders, and wholesale partners, understanding these fluctuations is critical for structuring competitive loan offerings, guiding clients, and maintaining strong deal flow. Private lending continues to serve as an essential alternative to traditional bank financing, and staying ahead of interest rate trends can help wholesale partners optimize their business strategies and client relationships.

The Role of Interest Rates in Private Lending

Private lending operates outside of the restrictions of conventional lending institutions, offering flexible financing options for borrowers who may not qualify for traditional loans. Interest rates in this sector are affected by various factors, including risk assessment, market conditions, and loan structure. While private lending rates tend to run higher than bank rates, the flexibility and speed of execution make these loans attractive to borrowers—and lucrative for brokers and wholesale lenders.

Factors Influencing Private Lending Rates

Market Conditions

Central banks, such as the Federal Reserve, set benchmark interest rates that indirectly impact private lending. When these rates rise, the cost of capital increases, leading private lenders to adjust their pricing. Conversely, lower interest rates create more affordable financing options, increasing borrower demand.

Risk Premiums and Loan Structuring

Private lenders take on higher-risk borrowers, including real estate investors, developers, and those with unconventional financial backgrounds. To mitigate this risk, lenders apply a premium to their interest rates. Brokers and wholesale partners should educate clients on how risk factors—such as credit history, loan-to-value (LTV) ratios, and property types—affect pricing.

Loan Term and Purpose

Short-term bridge loans, fix-and-flip financing, and construction loans often have higher interest rates due to their fast turnaround and associated risk. Long-term rental loans, while typically lower in cost, still carry rates above conventional mortgages. Brokers must align loan products with their clients’ investment strategies while optimizing financing terms.

The Impact of Interest Rate Fluctuations on Wholesale Lending

As interest rates shift, brokers and private lenders must adjust their approach to pricing, structuring deals, and advising clients.

Higher Interest Rates: Challenges and Opportunities

  • Increased Borrowing Costs: Higher rates raise monthly payments, which can reduce borrower affordability and investment feasibility.
  • Shift in Borrower Demand: Investors may hesitate to take on new projects, opting instead for creative financing solutions or lower-risk strategies.
  • Competitive Loan Structuring: Brokers and private lenders can differentiate themselves by offering rate buy-down options, extended terms, or alternative loan structures to maintain deal volume.

Lower Interest Rates: Growth Potential

  • Higher Loan Volume: More borrowers enter the market when rates decrease, creating opportunities for brokers to originate a higher volume of loans.
  • Market Expansion: A lower cost of capital encourages real estate investment, increasing demand for private financing.
  • Referral and Partnership Growth: Brokers can leverage market conditions to strengthen relationships with investors, realtors, and other industry partners seeking capital solutions.

Strategies for Brokers and Wholesale Partners to Navigate Interest Rate Changes

1. Educate Clients on Market Trends

Providing borrowers and referral partners with insights into interest rate trends enhances credibility and strengthens relationships. Inform clients about when to lock in rates, refinance, or take advantage of favorable lending conditions.

2. Diversify Loan Offerings

Brokers and private lenders should have a mix of short-term and long-term loan products to accommodate different borrower needs in varying rate environments. This flexibility allows them to remain competitive and cater to a wider audience.

3. Leverage Alternative Financing Solutions

When rates rise, clients may seek creative funding options such as structured joint ventures, seller financing, or mezzanine loans. Brokers who offer these solutions can capture business that might otherwise be lost due to high financing costs.

4. Strengthen Referral Partnerships

Building strong relationships with mortgage brokers, real estate agents, and financial advisors ensures a steady flow of leads, regardless of interest rate conditions. A well-established network can help brokers remain resilient during market fluctuations.

5. Offer Rate Lock Options

In an unpredictable rate environment, offering clients the ability to lock in rates for a certain period can provide them with stability and confidence. This strategy helps borrowers secure favorable terms while mitigating potential risks of rate hikes.

6. Utilize Technology to Optimize Pricing Strategies

Wholesale lenders and brokers can use advanced analytics and loan pricing engines to track market trends and adjust their loan offerings accordingly. Staying data-driven allows for real-time adjustments to remain competitive.

7. Focus on Niche Markets

During periods of volatility, brokers and lenders can target niche markets, such as fix-and-flip investors, self-employed borrowers, or those looking for multifamily financing. Understanding the specific needs of these borrowers and offering tailored solutions can help maintain business growth.

How RCN Capital Supports Brokers in a Changing Market

As a leading private lender, RCN Capital understands the challenges brokers and wholesale partners face when interest rates fluctuate. We provide competitive loan programs designed to help brokers secure the best deals for their clients, whether they need short-term fix-and-flip financing, long-term rental loans, or new construction funding.

Why Partner with RCN Capital?

  • Competitive Rates & Flexible Terms: We offer customized loan structures to help brokers meet their clients’ unique needs.
  • Fast Closings: Quick approval and funding ensure your clients can move on time-sensitive opportunities.
  • Dedicated Broker Support: Our team works closely with brokers and referral partners to maximize their success in private lending.
  • Consistent Capital Access: RCN Capital provides reliable funding options so brokers can maintain steady deal flow even during market fluctuations.
  • Industry Insights & Training: We keep our partners informed with educational resources, webinars, and market trend analysis to help them navigate the evolving lending landscape.

Are you looking to expand your lending business and navigate interest rate changes effectively? Connect with RCN Capital today and grow your wholesale lending portfolio with confidence!