Nectar funding is not a loan and it’s not a mortgage; it’s an entirely new way of accessing capital to grow your short-term rental portfolio. 

When you’re a successful short-term rental owner or operator, you may reach a point where a mortgage is not enough to help you grow as quickly as you’d like. 

That’s where Nectar comes in. Our cash flow financing can work in tandem with your mortgage, whether you need down payment assistance to close on the property or you’re looking for additional capital to renovate or furnish one of your STR units. 

Nectar is not out to replace mortgages, but since the concept of a mortgage is widely understood, it gives us a helpful framework for comparison. In particular, here are three ways that Nectar differs from a mortgage.

Asset Backed vs. Cash Flow Backed 

When you get a mortgage, it’s tied to the specific asset, and the bank puts a lien on the property. Nectar, on the other hand, provides an advance on your future cash flow, based on your profit and loss statements and other information we gather during the application process.

Unlike a mortgage, Nectar doesn’t require a down payment or charge origination fees. The capital you receive from Nectar is also much more flexible than a mortgage. You can use it for a down payment on a mortgage, furniture, renovations, CapEx repairs, or even to build out your team. We’ve even seen GPs put it toward their GP co-invest and property managers use it to acquire other management companies.

More Restrictive with Growth vs. Consistent Approach with Growth

The more your STR portfolio expands, the more restrictive banks will likely become when determining your mortgage options. Even if you don’t have the maximum amount of 10 personal mortgages, you may have trouble qualifying for additional mortgages as you grow your portfolio. 

Lenders are typically more cautious about approving people with multiple pre-existing mortgages, and you may see your down payments and interest rates increase with every new property you purchase. 

On the flip side, Nectar is purpose built to finance short-term rentals. We believe an experienced investor with professional-level management is less risky than the mom and pop Airbnb host with a single property. This is one of the key differentiators between Nectar and other capital sources, which were not built with the STR industry in mind. Because Nectar’s financing is based on your cash flow, our ability to fund you actually grows as your portfolio and cash flow grow.

Long Term vs. Short Term

Mortgage terms are generally straightforward and fairly consistent. The two most common being 15-year and 30-year options.

As an entirely different type of product, Nectar financing generally provides 1-5 year terms. . The terms are highly flexible, allowing the customer to create their most optimized set up.

Want the best cost of capital? A shorter term will provide that. 

Want more money or lower monthly payment? We can look at a 3-5 year term.

Our team is ready to work with you to put together the most optimal capital stack for your needs.