Private real estate lending has changed substantially in recent years. It began with local hard money lending, and then grew with real estate crowdfunding platforms. Today, private credit funds are shaping the market.
Each step made it easier to get money for real estate projects. Institutional private credit now provides the stability and scale that modern borrowers need. At Groundfloor Lending, we've seen every part of this journey.
Our recent $75 million and $82 million bond sales, now totaling $157 million, show how much real estate private credit has grown. This asset class is now an industry standard. Borrowers get dependable funding for their real estate projects. At the same time, real estate investors can be sure their cash flow is secure, even when the market shifts.
The Role of Crowdfunding
Crowdfunding was a huge step forward in real estate. It allowed thousands of small investors to support real estate developments, which created more investment opportunities for real estate professionals.
Groundfloor Lending used crowdfunding to grow and expand across the country. It proved that new lending models could work outside of traditional banks. However, crowdfunding also had its limits.
For example, market headlines often caused investors to pull back, which made funding uncertain. Some platforms also lacked strong systems for checking loans and managing assets.
These challenges showed that while crowdfunding opened doors, institutional money was needed for long-term stability. While Groundfloor Lending still uses crowdfunding, our priority today is institutional private credit.
Why Private Credit is a Better Choice
Institutional private credit fixes the problems that crowdfunding alone couldn't. These private credit funds pool capital from large investors like pension funds and insurers. This creates reliable funding with set terms.
Borrowers get immediate funding certainty, and real estate investors get steady returns. Groundfloor Lending's bond-backed structure combines the speed of private lending with the stability of institutional lending. This approach works well for large real estate projects.
Private credit also creates new investment opportunities. By offering bigger loans and consistent funding, it helps real estate professionals pursue investment strategies that can grow across multiple markets.
Why Funding Certainty Matters Now
Beating the Competition
Today's real estate cycle moves fast. Properties that once sat for months are now sold in days. Any delay in getting a loan can cause a borrower to lose a deal.
Institutional private credit offers funding that is as good as cash. This lets professional real estate investors compete directly with all-cash buyers while still using the benefits of a loan.
The True Cost of Delays
Funding delays cost more than just interest. They can force developers to reschedule crews and pay higher prices for materials. Our analysis reveals common issues include extended carrying costs, labor scheduling problems, and rising material prices. Private credit lenders solve these risks by providing committed capital from day one. Certainty protects both budgets and timelines.
Groundfloor Lending’s Institutional-Grade Approach
Full-Cycle Lending Infrastructure
Institutional private credit is more than hard money lending. It requires the systems to handle loans from start to finish. Groundfloor Lending operates as a full-lifecycle lender.
We handle every stage in-house, from finding and checking loans to managing draws and oversight. This consistency helps both borrowers and professional real estate investors. It also allows us to adapt quickly to changing market conditions.
Proprietary Technology and Real-Time Market Data
Our lending platform incorporates current market data and project analytics to support faster decisions and stronger risk assessments. Borrowers and real estate investors benefit from valuation models, compliance systems, and consistent construction oversight that help keep projects on budget and on schedule.
The Bond-Funded Advantage
Groundfloor Lending’s bond offerings prove our institutional credibility. By grouping loans into securities, we get stable funding not tied to what small investors are feeling. This spreads out risk and creates predictable costs.
Independent rating agencies approve our standards. For borrowers, this means consistent funding. For real estate investors, it provides dependable returns and reliable cash flow across cycles.
Real Estate Private Credit vs. Traditional Lending
Speed and Efficiency
Traditional banks often need 8-12 weeks to approve and fund residential real estate projects. In contrast, private credit lenders can close in 7 to 14 days. This speed makes it a strong option for real estate projects where timing is critical.
Risk Management
Private credit lenders apply institutional-level risk checks. They evaluate borrower experience, project plans, market conditions, and exit strategies. This process keeps loss rates low while staying competitive.
Borrowers get predictable funding access. Real estate investors gain professional oversight and more consistent cash flow. Together, these practices support sustainable results.
Flexible Structures
Banks rely on standard products, while private credit adapts to borrower needs. At Groundfloor Lending, we offer deferred payment structures that remove monthly obligations during construction.
This flexibility lets borrowers focus resources on execution instead of debt service. It improves project economics and increases completion rates for real estate developments.
The Institutional Quality Difference
Transparency and Reporting
Institutional investors demand transparency. Private credit platforms provide detailed reporting, portfolio updates, and risk analytics. Borrowers benefit from predictable communication and clear approval processes.
At Groundfloor Lending, we maintain consistent lending standards. Borrowers can plan confidently, knowing our approval criteria remain stable throughout the project lifecycle.
Compliance and Standards
Private credit operates under institutional oversight, including securities laws and lending regulations. Borrowers and real estate investors gain protection from these professional standards.
Groundfloor Lending is licensed in over 30 states and follows strict compliance practices. This ensures consistent service quality regardless of project location.
Long-Term Relationships
Institutional private credit builds long-term borrower relationships. Groundfloor Lending’s repeat borrower rate exceeds 70 percent. This reflects our focus on supporting growth over multiple cycles.
By creating lasting partnerships, we build a sustainable lending ecosystem. This benefits real estate professionals, real estate investors, and communities alike.
FAQ
What is real estate private credit?
Real estate private credit is financing backed by institutional investors, such as private credit funds and securitizations. Groundfloor Lending also uses real estate crowdfunding platforms, but institutional capital is now our priority. This focus provides consistent funding and reliable returns.
How is private credit different from hard money lending?
Hard money lending often depends on individual investors and limited balance sheets. Groundfloor Lending pools institutional capital and complements it with crowdfunding when useful. Prioritizing private credit delivers stability, scale, and better investment opportunities.
Does Groundfloor Lending still use crowdfunding?
Yes, but to a smaller degree. Crowdfunding helped us grow and expand. Today, we prioritize institutional private credit because it provides certainty, scale, and professional standards that professional real estate investors require.
Why should professional real estate investors consider private credit lenders?
Private credit lenders provide faster approvals, flexible terms, and reliable cash flow. At Groundfloor Lending, we lead with institutional funding while maintaining access to crowdfunding. This balance supports complex real estate projects and diverse investment strategies.
Making the Strategic Choice
The shift from crowdfunding to institutional private credit reflects more than a financing change. It represents a larger move toward stability, professional standards, and scalable growth. For professional real estate investors, it creates investment opportunities to secure institutional-grade capital with confidence.
When evaluating lenders, look for proven track records, transparent fees, lifecycle capabilities, stable funding sources, and technology-driven processes. The future of real estate financing belongs to platforms that combine certainty with institutional quality.
At Groundfloor Lending, we deliver this combination. We remain committed to offering reliable private credit solutions that support real estate professionals and their long-term investment strategies.
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September 23, 2025