Same Market, Different Results: Why Some Lenders Are Winning Big

With DSCR loan volume up 105% year-over-year, top performers aren't riding the wave - they're creating it through better execution and infrastructure.

01 2025 RECAP

Private lending showed no signs of the typical early-year slowdown in first quarter 2025. Bridge loan volume was up 48% year-over-year (YOY), and DSCR loans surged 108% YOY.

But the growth story is nuanced. When reviewing data aggregator Forecasa's statistics and tracking the YOY progress of the top 100 national private lenders, 51 of the leading lenders either decreased or were exactly flat when comparing first quarter 2025 to first quarter 2024. Looking solely at file counts for the top 100 lenders, volumes increased by 6% over the same period.

With market volatility still top of mind, it's more important than ever for private lenders to keep an eye on rate movements and market signals. Encouragingly, despite recent swings in equity and debt markets, the secondary market for private lenders remains strong. If that holds, loan volume could continue its upward trajectory.

Let's now turn to the latest trends through April.

NATIONAL TRENDS

BRIDGE LOAN VOLUMES. April 2025 was once again an all-time high for bridge loan transactions written in Lightning Docs. With a total of 2,634 loans, April marked the fifth month in a row that has set a new high. When tracking the same 165 users who signed up to use the system on or before January I, 2024, we see a 48% YOY increase comparing volumes from 2025 to 2024 (see Fig. 1).

DSCR LOAN VOLUME. Although growth for bridge loans has been impressive, the increase in transactions for DSCR loans remains the standout. DSCR loan volume once again set records in April with 2,504 loans in the system from the entire user base. When looking at the same 37 users who started using the system on or before January I, 2024, DSCR volume was up a staggering 105% YOY (see Fig. 2).

BRIDGE INTEREST RATES & AVERAGE LOAN AMOUNTS. National bridge loan interest rates dropped again in April, from 10.74% to 10.65% (see Fig. 3). With II decreases over the last12 months, bridge loan interest rates are now 85 basis points lower than this time last year. Median rates held steady at 10.5%, narrowing the gap with the average.

Rate distribution shows 35% of loans falling between 10% and 10.99%, with an average April interest rate of 10.65%. A shift toward loans priced between 9% and 9.99%

appears to be the driving factor in the overall decrease in averages. One key factor is that the dominant bridge loan market, Los Angeles, saw its average interest rate drop by nearly 50 basis points in April.

On the other hand, average loan amounts ticked up. The average climbed to $664,287, the highest since December, while the median held at $350,000. This points to a healthy mix: While large deals are lifting the average, most lending remains focused on mid-range transactions.

DSCR INTEREST RATES AND AVERAGE LOAN AMOUNTS

DSCR rates fell four basis points to 7.52%, the fourth consecutive month after a sharp increase during the closing months of 2024 (see Fig. 4). Average loan amounts saw a slight dip to $317,604.

Although more than 63% of loans are still priced between 7% and 7.99%, the data is showing a meaningful shift toward lower rates. Similar to bridge loans, April's top market for DSCR loans, Philadelphia, saw average interest rates drop by 19 basis points.

INDEX SPREADS VS. BRIDGE AND DSCR LOANS. Despite a tumultuous month for federal economic policy, the10-year treasury showed no movement from March to April, staying put at 4.28%. DSCR loans and consumer mortgages went in opposite directions, with consumer mortgages increasing by eight basis points, while DSCR rates dropped by four. As a result, the spread between DSCR loans and the10-year treasury tightened to 3.24%, signifying confidence in the market, although not as aggressive as in fourth quarter 2024, when spreads were much closer to 3%.

TOP BRIDGE LOAN STATES. Through the first third of the year, the top 10 states for bridge loans have remained consistent with 2024. California, Florida, and Texas still lead, while North Carolina, New Jersey, and Pennsylvania have climbed the ranks (each up two notches). The complete top 10 list, ranked in order from top to bottom in 2025, include California, Florida, Texas, North new markets, Washington and Massachusetts stand out as highly populated states where DSCR volume remains relatively low. The complete top 10 list through 2025 includes Florida, Pennsylvania, Ohio, Texas, New Jersey, New York, California, Georgia, Illinois, and North Carolina.

EXECUTION, NOT THE ECONOMY, DETERMINES MARKET LEADERS

Macroeconomic conditions impact all lenders equally, but outcomes vary widely. Half of the top private lenders saw volumes decline or stay flat in the first quarter of this year; the other half grew. The difference wasn't the economy; it was execution.

Lenders are well served by focusing on better execution in their businesses, including streamlining processes. At Lightning Docs, we consistently see our users outperform their peers by wide margins. The reasoning is easy to appreciate: Lenders focused on building strong foundations from which to scale will continue to dominate in uncertain markets.

By Nema Daghbandan

Private Lender, The Official Magazine of AAPL

Summer 2025, p. 68-78