Generally it is difficult for investors and wholesellers to get short-term loans quickly. This can be critical if a great potential deal is on the short term horizon. A lot of these short term loans are with unscrupolous lenders with super high interest rates and bad terms. Potentially, a transaction funding is a better choice in most cases for financing real estate transactions and other investment opportunities. Let us take an educated look at this as an option.

What is Transactional Funding

Transactional Funding is also known as "same day funing" or "flash funding". This is a specialized financial procedure which investors get very short term loans to complete transactions. These short term loans are paid back extremely quickly. In most cases these loans are paid back within a day or week time frame. The loans are paid back with profits from purchase of the property. These alternative forms of financing, investors and wholesellers are used to buy and sell high profit properties without risking their own savings.

Rand Merchant Bank (RMB), the corporate and investment banking arm of FirstRand pointed to a solid performance in its full-year financials, highlighting an 18% growth in core lending.

Pre-tax profit was up 17% from June 2021, and the ROE improved to 22.1% – up from 18.7% at June 2021, it said on Thursday (15 September).

“Our results showed a continued improvement in the credit quality of RMB’s core lending portfolio. We advanced R126 billion in new loans and refinancings across South Africa and broader Africa,” said RMB CEO James Formby.

The increase in client demand is a sign of improving confidence, especially as much of the funding is earmarked for South African investment, the bank said. “It is part of the reason that South Africa, and many of its businesses, are looking more attractive to investors again.”