Wholesale Funding Warehouse for lenders

One well-known funding source is **Commercial Mortgage-Based Securities (CMBS).** Usually issued **special purpose vehicles**, these asset-backed securities are created by combining commercial mortgages. SPVs are legal corporations formed specifically to house underlying mortgages and issue securities to investors. CMBS separates itself with varying degrees of risk and rewards into tranches:
Ranked for payments, senior tranches are the least risky in case of a default. **Junior Tranches** have greater hazards and pay last, maybe resulting in more benefits for those eager to accept that risk.

Lending in Australia has evolved recently as **Non-Bank Lenders (NBLs)** obtain appreciable market share. Driven by technology changes lowering acquisition costs, improving credit decision-making, and shortening processing times, NBLs account for an increasing share of both commercial and personal loans. Still, banks have an advantage because of their reasonably cheap funding sources and varied approach.

Usually starting with **senior funding**, NBLs record this on their balance sheets. Including the lending pool, this type of debt claims the whole asset base of the lender. Creating a Warehouse Framework Usually, the establishment of a warehouse—an off-balance-sheet funding source—is the period of interest. Designed to be bankruptcy-distance from the corporate organization, this structure is funded by specialized credit investors, therefore reducing risk for investors and financing costs for the NBL. Including funds sponsored by banks**
Once a warehouse is established, NBLs could add **bank funding** into a framework. Usually made of private funds, a **mezzanine lender** has to be secured and answers subordinate top lenders. This layered finance system helps to somewhat optimize the NBL's capital plans.

As they become more and more important in the market, NBLs could search the capital debt markets for **securitization**. Important for boosting operations and reaching expansion goals, this process helps NBLs better diversify their financial sources. All through this evolving financing plan, a qualified financial partner can provide perceptive analysis.

A large part of what Mortgage Ai does is work with family offices who view the right lending deals as a low-risk high yielding strategy for fixed income. There are some cases when a lender can approach a family office to co-underwrite the loan. Mortgage Ai has completed such transactions where by the lender on record and the family office were tenants in common on the mortgage documentation. There can be many incarnations of such an arrangement where its templated or completely B-Spoke. Which can be much more turnkey that needing an institution style facility which can take time.