In one sentence
A lender holding loans on its own books rather than selling or securitizing them, bearing the credit risk directly.
The longer version
Balance-sheet lenders, banks, credit unions, life companies, and debt funds, keep the loans they make and live with the outcomes. That direct exposure tends to make their diligence and servicing rigorous.
Holding the risk means holding the file, for years, which is why balance-sheet lenders care so much about a durable, retrievable record.
Common questions
- What is a balance sheet lender?
- A lender that holds its loans on its own books rather than selling or securitizing them, bearing the credit risk directly.
- Why might a borrower prefer a balance sheet lender?
- Balance sheet lenders can be more flexible on structure, prepayment and later modifications, since decisions are not constrained by a securitization's rules.
- Who are typical balance sheet lenders?
- Banks, credit unions, life insurance companies and many debt funds.
Keep reading
- How life companies run commercial mortgage operationsThe long servicing tail.
- The due diligence checklist, built to be runChecklists as systems, not documents.
- Commercial real estate lending operations at a bankExaminer-ready as the operating standard.
- Commercial loan softwareWhere this sits in the lending stack.