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Playbooks

Sourcing capital for your portfolio

Originator

Sourcing capital for your portfolio

Finding the right capital for your loan portfolio is one of the most consequential decisions you’ll make as an originator. The wrong partner creates friction that compounds for years. The right partner becomes a strategic asset that scales with you.

This overview introduces the capital provider landscape and helps you identify which counterparty types fit your stage. Each provider type has its own guide with detailed approaches, timelines, and negotiation considerations.

The capital provider landscape

Your first decision is understanding who finances portfolios like yours. Different capital providers have different risk appetites, pricing models, and structural preferences. Matching your stage and asset class to the right counterparty type saves months of dead-end conversations.

Quick reference: provider types

Provider TypeTypical Facility SizePricing RangeTimeline to CloseBest For
Banks$25M-$500M+SOFR + 175-3504-9 monthsEstablished originators seeking scale
Credit funds$10M-$200MSOFR + 250-5002-6 monthsFlexible terms, faster execution
Insurance capital$50M-$500M+SOFR + 150-3006-12 monthsLong-duration, investment-grade adjacent
Family offices$5M-$50M8-15% all-in4-12 weeksEarly stage, bespoke arrangements
Whole loan/forward flow$10M-$100M+Price to par2-4 monthsCapital-light model, balance sheet management
Government/DFI$1M-$50MBelow market6-18 monthsMission-aligned, subsidized capital

Matching your stage to the right counterparty

The single biggest mistake originators make is approaching the wrong counterparty for their stage. A pre-revenue company pitching JP Morgan wastes everyone’s time. A $200M originator chasing family office capital leaves money on the table.

Your StagePortfolio SizeBest TargetsWhy
Pre-launch / first 6 months$0-$5MFamily offices, friends and familyBanks won’t look; need patient capital while you build track record
Early growth$5-$30MFamily offices, smaller credit funds, some regional banksLarge enough for structured finance, too small for institutional
Institutional threshold$30-$100MRegional banks, credit funds, some insurance asset managersCompetitive pricing available; multiple options
Scale$100M+Money center banks, large credit funds, insurance companiesFull market access; optimize for terms

Provider fit by asset class

Not all providers finance all asset classes. Knowing who finances what saves you from approaching the wrong counterparties.

Consumer lending (unsecured personal, BNPL, credit cards)

  • Banks: Regional and money center, well-understood credit box
  • Credit funds: ABF-focused and multi-strategy, higher advance rates available
  • Family offices: Early stage before bank access
  • Insurance: Limited appetite for unsecured consumer

Auto lending

  • Banks: Deep market, competitive pricing
  • Credit funds: Subprime specialists, used vehicle experts
  • Insurance: Strong appetite for prime auto given duration matching
  • Government: Limited programs for CDFI-eligible auto lenders

Equipment finance

  • Banks: Traditional equipment finance groups
  • Credit funds: Emerging asset class specialists
  • Insurance: Appetite for investment-grade lessees
  • Government: SBA programs for small business equipment

Real estate (bridge, fix-and-flip, rental)

  • Banks: Community and regional for rental, money center for bridge
  • Credit funds: Major providers across real estate credit
  • Insurance: Long-duration rental portfolios
  • Government: State housing finance programs

Specialty finance (litigation, royalties, trade receivables)

  • Banks: Very limited; most avoid novel asset classes
  • Credit funds: Primary source for specialty assets
  • Family offices: Strong appetite for differentiated yield
  • Insurance: Selective based on credit quality and duration

Direct outreach vs. placement agents

One of your first tactical decisions is whether to run your own capital raise or engage a placement agent. Both approaches work; the right choice depends on your relationships, complexity, and timeline.

When to run your own process

You have existing relationships. If you already know capital providers from prior roles, industry events, or previous deals, you can reach out directly. A warm introduction from someone they respect is worth more than any placement agent.

The deal is straightforward. A consumer loan warehouse with standard eligibility criteria doesn’t need much explanation. If capital providers can quickly understand your asset and your track record speaks for itself, you don’t need a placement agent to educate the market.

You want to build direct relationships. Every capital raise is an opportunity to expand your network. Running your own process forces you to develop relationships that will serve you on future deals.

You want to avoid placement fees. At 0.5-2% of committed capital, placement fees on a $50M facility run $250K-$1M. That’s real money, particularly for a first facility where every dollar matters.

When placement agents earn their fee

You lack capital markets relationships. If you’re a first-time originator without investment banking or structured finance backgrounds, you don’t know who to call. A good placement agent has relationships with 50+ capital providers and knows which ones are active in your asset class.

Your asset class needs explanation. Novel or complex asset classes require education. A placement agent who has already introduced their capital provider contacts to similar deals can accelerate the learning curve.

You need to run a competitive process quickly. If you’re under time pressure (existing facility maturing, acquisition opportunity, rapid growth), a placement agent can simultaneously engage multiple providers. Doing this yourself while running a business is difficult.

You want access to specific providers. Some capital providers only look at deals brought by placement agents they trust. If you want access to those providers, you need the introduction.

Fee structures

StructureTypical RangeWhen It Works
Retainer + success fee$10-50K retainer + 0.5-1% successComplex deals, longer timelines
Success fee only1-2% of committed capitalStraightforward deals, confident agents
Hourly/advisory$300-600/hourAdvisory without formal engagement

Retainer fees are typically credited against success fees. Success fees are payable at closing, though some agents negotiate a portion upon term sheet execution.

Negotiate a clear definition of “success.” If the agent introduces you to a provider and you don’t close for 18 months, is a fee owed? Define the tail period (typically 12-24 months after engagement ends) and what constitutes an introduction.

Preparing for a capital raise

Most capital raises fail not because of the deal, but because the originator wasn’t ready. Data rooms are incomplete, tapes are messy, management is unavailable during diligence, or the ask is unclear.

Timing your approach

Start conversations 6-9 months before you need capital. This gives time for:

  • Initial outreach and screening (1-2 months)
  • Diligence (2-4 months)
  • Documentation and closing (2-4 months)
  • Buffer for unexpected delays

Seasonal considerations: Bank credit committees often slow down in late December and August. Fund deployment pressure peaks at year-end and quarter-end (capital providers want to deploy committed capital before reporting periods). If you can time your process to close at quarter-end, you may get faster decisions.

Data room essentials

Your data room is the first substantive view a capital provider has of your operations. The detailed requirements are covered in preparing your data room. For capital sourcing purposes, ensure you have these ready before any outreach:

Tier 1 (screening materials, ready in 24 hours):

  • Executive summary / teaser (2-4 pages)
  • Management presentation (10-15 slides)
  • Loan tape (current, clean, complete)
  • Static pool data (cohort performance by vintage)
  • Underwriting guidelines

Tier 2 (diligence materials, ready within 1 week):

  • Financial statements (audited if available, reviewed at minimum)
  • Sample loan files (5-10 representative files)
  • Servicing policies and procedures
  • Legal structure documentation
  • Management bios with full employment history

Internal readiness assessment

Before you engage capital providers, honestly assess whether you’re ready. The originator’s readiness assessment provides a detailed checklist. The summary version:

Are you ready for diligence?

  • Can you produce a clean loan tape with all required fields within 24 hours?
  • Do you have static pool data showing cohort performance?
  • Are your underwriting guidelines documented and consistently applied?
  • Do you have a production-grade servicing system (not Excel)?

Is your legal structure sound?

  • Is your origination SPV (or path to one) clear?
  • Do you have all required state licenses?
  • Are there any pending litigation or regulatory actions?

Can you manage a facility?

  • Do you have the systems to track pledged versus unpledged assets?
  • Can you produce borrowing base certificates?
  • Is there management bandwidth for a 3-6 month capital raise while running the business?

If the answer to any of these is “no,” fix it before you start outreach. Approaching capital providers before you’re ready damages credibility and makes future approaches harder.

Working conferences and industry events

Conferences are where relationships start. You can research capital providers online, but you can’t assess whether they’re the right partner until you’ve met them.

The ABF conference circuit

ABS East (Miami, October) is the main event. Over 8,000 attendees including all major banks, credit funds, and investors. If you attend one conference per year, make it this one. Every capital provider who matters will have a team there.

ABS West (Los Angeles, February) is smaller and more intimate (2,000-3,000 attendees). Better for deepening existing relationships than making new ones.

SFVegas (Las Vegas, February) is structured finance focused with strong capital provider attendance. Often scheduled near ABS West, so many do both.

IMN conferences are asset-class specific: Consumer ABS, Equipment Finance, Auto Finance. Attendance runs 300-800 depending on the vertical. Smaller events mean easier access to decision-makers.

Making meetings productive

Pre-schedule meetings 3-4 weeks out. Capital providers’ calendars fill weeks before the conference. If you wait until you arrive, the people you want to meet are already booked.

Lead with what matters to them. Don’t waste their time on your founding story. Start with: “We’re a $40M consumer installment lender looking for a $50M warehouse. Here’s our portfolio, here’s our performance, here’s why we’re a fit for your mandate.”

Close with a clear next step. “Can we send our data room and schedule a follow-up call?” is better than “We’ll be in touch.”

Follow up within 48 hours. Send materials and propose specific meeting times while the conversation is fresh.

Provider-specific guides

Each capital provider type requires a different approach. The detailed guides cover how to find them, what they’re looking for, how to pitch, typical terms, and relationship management:

Cross-references

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