Single Note-on-Note Financing: A Powerful New Tool for Large-Scale Commercial Real Estate Lenders

As the private lending market continues to mature, demand for creative, large-scale financing solutions has surged. In response, Western Alliance Bank now offers single note-on-note financing designed to give private commercial real estate lenders the flexibility and capital they need to pursue complex, high-value opportunities.

Clients already familiar with Western Alliance’s Note Finance Group will find this new offering a natural extension of an existing relationship — one that combines deep industry experience with the agility to meet evolving needs.

Understanding Single Note-on-Note Financing

Single note-on-note financing is a specialized lending structure designed for large commercial real estate loans, typically $20 million and above. It serves a different purpose than a traditional line of credit:

• With a note finance line of credit, underwriting focuses on the private lender’s overall creditworthiness and its pool of loans held as collateral. A line of credit works well for private lenders managing multiple smaller loans. But that credit line may have concentration restrictions that are not suitable for a larger project.
• Single note-on-note financing involves underwriting each individual loan or note. The bank lender (in this case, Western Alliance) conducts more due diligence on the specific real estate asset, underlying Sponsor, the project’s economics and the transaction structure. The lender then provides leverage directly against the individual note.

The bespoke nature of single note-on-note underwriting ensures that the financing is tailored to the unique characteristics of each deal — whether it’s a transitional property requiring renovation, a ground-up construction project or another complex commercial real estate venture.

A common example: A private lender has committed $70 million to a commercial real estate project. The lender’s existing line of credit caps at $20 million per loan. However, the lender can engage Western Alliance to obtain a $50 million single note-on-note facility that provides back-leverage for that single project, allowing the deal to move forward efficiently.

When Single Note-on-Note Makes Sense

Single note-on-note financing is ideally suited for private commercial real estate lenders who are financing large, complex projects that demand more in-depth analysis. For projects in the $20 million to $100 million range, where the concentration risk justifies the additional underwriting effort, this structure provides the leverage needed to execute ambitious deals.

The tradeoff? A more thorough underwriting period — typically 45-60 days — and higher closing costs compared to drawing on an existing line of credit. For smaller loan sizes, these costs may not be economically justified. However, for substantial projects where the economics support the investment in comprehensive due diligence, single note-on-note financing unlocks opportunities that would otherwise remain out of reach.

Why Choose Western Alliance for Single Note-on-Note Financing?

The private lending market continues to expand, and groups that were previously on the sidelines are ramping up their activity. Western Alliance recognized this trend and launched our single note-on-note offering in response to direct customer demand.

Clients choose Western Alliance because of its dedication and market reputation. Western Alliance Note Finance offers:

• Leadership in note finance since 2015
• Flexible, custom-tailored solutions
• Exceptional customer service
• A trusted, committed relationship banking team
• Programmatic focused operations
• Significant national capabilities

Above all, it’s about trusted relationships. For many private lenders, single note-on-note financing is more than a one-off transaction. As lenders originate new loans, they can plan with confidence knowing that Western Alliance is ready to provide leverage once the underlying deal closes. 

Reach Out to Learn More

If you’re an established private commercial real estate lender exploring creative financing solutions for your next major project, we invite you to learn more. Contact your Western Alliance banker to discuss how we can help you scale your platform and capture more opportunities.