How to Choose the Right Funding Structure

Question 1: What is the actual funding gap?

• Only the deposit? EMD funding may be the issue to solve.
• Need to buy before immediately reselling? A double close may be worth evaluating.
• Several capital sources must be coordinated? A stack-method structure may be relevant.
• Need long-term acquisition debt? Transactional funding is usually not the whole answer.

Question 2: What is the repayment event?

Every short-term funding source should have a clear repayment event. Examples include an end-buyer closing, lender funding, refinance, sale proceeds, or another contractually supported source.

Question 3: Who controls the money?

Many transaction funders prefer or require funds to move through an established title or escrow company. The funder wants independent confirmation that the transaction and repayment mechanics are real.

Question 4: What happens if the deal does not close?

This is where risk lives. Understand refundability, extensions, cancellation rights, deadlines, and who bears the loss if the expected exit does not happen.

Question 5: Does the deal still make sense after fees?

Funding can be expensive because it may be short term, highly specialized, and dependent on closing coordination. Always calculate profit after funding fees, title charges, commissions, taxes, holding costs, and unexpected expenses.

A simple framework

Deposit problem → EMD.
Title-transfer/resale problem → Double close.
Timing gap across multiple capital sources → Stack Method.
Long-term ownership problem → permanent or acquisition financing.

Educational information only. Deal Support Network does not provide legal, tax, investment, or financial advice. Funding availability and terms depend on the specific transaction and provider.