Capital sourcePrivate debt fund capital — speed and leverage banks can't match
Private debt funds are non-bank lenders that finance bridge, construction, and value-add commercial real estate — faster, with higher leverage and a story-friendly underwrite, in exchange for a higher floating rate. North Bay Capital sources and places your deal with the right fund.
A private debt fund is a pooled, non-bank lender — capital raised from institutions and accredited investors and deployed as senior commercial real estate loans. Because funds aren't constrained by bank deposit regulations, they underwrite to the asset and the business plan rather than a rigid credit box, which lets them move quickly, lend higher on the capital stack, and structure around transitional situations a bank won't touch. As a broker, North Bay Capital maintains relationships across many of these funds and places your scenario with the one whose box, pricing, and timeline fit the deal. We are not the lender — we source the capital and negotiate the terms on your behalf.
- Value-add multifamily or commercial acquisitions where a bank's leverage and timeline fall short
- Ground-up construction or heavy rehab needing 70–80% of cost with future-funding draws
- Time-sensitive purchases — auctions, 1031 deadlines, or a quick close to win the contract
- Bridge-to-stabilization plays: lease-up, repositioning, or seasoning ahead of an agency or bank takeout
- Strong assets with a 'story' — a recent credit event, light track record, or partial occupancy a bank won't underwrite
- Cost of capital is higher than a bank or agency loan — best used as a bridge to a cheaper permanent takeout, not as long-term financing.
- Floating rates mean carry can rise with SOFR; most funds require a rate cap, which adds upfront cost and should be modeled into the business plan.
- Shorter terms and origination/exit fees (often 1–2 points each) demand a clear, executable exit; if the plan slips, extension fees and re-margining can erode returns.
Private debt fund — questions
How is a private debt fund different from a bank?
A debt fund lends its own pooled capital instead of insured deposits, so it isn't bound by the same regulatory credit box. That means higher leverage (often 75–80% of cost), faster closings (2–4 weeks vs. 60–90+ days), interest-only payments, and a willingness to underwrite transitional or 'story' deals — in exchange for a higher floating rate. It's bridge capital, not permanent financing.
What rate and leverage should I expect in 2026?
Pricing is typically floating at SOFR plus 300–600 basis points — roughly 7% to 11% all-in depending on asset, leverage, and sponsor strength. Expect up to ~75% LTV on stabilized bridge and 75–80% of total cost on construction or value-add, with origination and exit fees commonly around 1–2 points each. We shop multiple funds to tighten the spread and fees for your specific deal.
Is debt fund financing recourse or non-recourse?
Most debt fund loans are non-recourse with standard 'bad-boy' carve-outs (fraud, bankruptcy, misappropriation). You can often trade a recourse guaranty for better leverage or a lower rate, and a completion guaranty is typical on ground-up construction. We structure the guaranty package to fit your risk tolerance.
How fast can North Bay Capital close a debt fund loan?
Once we have the deal package, we can usually circulate term sheets within days and close in about 2–4 weeks, assuming third-party reports (appraisal, environmental, title) and your diligence items move on schedule. Because we already know each fund's box and decision-makers, we route your scenario to lenders most likely to perform on your timeline — critical for auctions, 1031 deadlines, and competitive contracts.
Let's find the right capital for it.
Tell us about the asset and the business plan — we'll source and place the financing across our lender network.