BANK LOAN VS. INVESTOR FUNDING, WHICH MAKES MORE SENSE?
the idea of someone else having a say in every decision just didn’t sit right
Totally get that. For me, it came down to:
- Bank = more paperwork, but I call the shots.
- Investor = faster cash, but they might want cheaper fixtures or rush jobs.
- Had a buddy go the investor route—he ended up with laminate counters instead of granite because his partner wanted to save money. Not for me.
At least with the bank, once you’re approved, you’re free to do things your way (within budget).
At least with the bank, once you’re approved, you’re free to do things your way (within budget).
That’s been my experience too, but I’ll say—banks can be sticklers about how you allocate funds, especially if you’re dealing with construction draws. They’ll want documentation for everything, and sometimes that slows things down. Investors can be pushy, but they’re also more flexible if you need to pivot mid-project. Depends how much control you want vs. how much red tape you can tolerate.
They’ll want documentation for everything, and sometimes that slows things down.
Ugh, yes, the paperwork parade. I swear, last time I did a reno with bank funding, I spent more time scanning receipts than picking out tile. Investors can be nosy, but at least they don’t need every coffee run documented...
Bank Loan Vs. Investor Funding, Which Makes More Sense?
That paperwork grind is real. I remember one project where the bank wanted a photo of every stage—framing, drywall, even the insulation going in. I get why they do it, but man, it felt like I was building a scrapbook instead of a house. With investors, it’s more like, “Show me the numbers and progress pics,” and they’re good. Less red tape, but sometimes they want more say in design choices, which can get interesting... Trade-offs everywhere, I guess.
That photo documentation is a pain, I totally get it. Banks love their checklists—sometimes I think they want proof you used the right screws, not just that the wall exists. It can feel tedious, but in my experience, that level of detail does help if there’s ever a dispute or delay. On the flip side, investors being hands-on with design can be tricky. I’ve had folks insist on “open concept everything,” even when it made no sense for the structure. At the end of the day, it’s just balancing who you want to answer to—paperwork or personal taste. Both have their headaches...
