How DuckFund Built a Better EMD

Written by:

Steve Marcinuk

Date:

26 Feb 2025

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“In commercial real estate development, having cash tied up in earnest money deposits can be the difference between seizing a prime opportunity and watching it slip away,” says Anna Kogan, Founder and CEO of DuckFund, a pioneering financial services firm that’s reshaping how developers approach earnest money deposits (EMDs).

For commercial real estate developers and investors, earnest money deposits present a critical challenge in today’s market. These deposits, ranging from hundreds of thousands to millions of dollars, serve as crucial proof of commitment but create a substantial operational bottleneck. When capital is locked up in EMDs, developers must often choose between pursuing new opportunities or maintaining adequate operating reserves for existing projects.

Traditional financing solutions fall short of addressing this challenge. Construction loans typically don’t cover earnest money deposits, and conventional lenders hesitate to provide EMD financing due to the unique risks involved during the due diligence period. This gap in the market has left many developers struggling to balance their growth ambitions with capital constraints.

An Innovative Solution

DuckFund has developed an elegant solution to the EMD challenge that deliberately avoids the complications of traditional lending. “We’ve structured our offering as a service product, not a loan,” explains Kogan. “This means developers can access the capital they need for EMDs without impacting their debt capacity or existing lending relationships.”

With DuckFund’s approach, capital is available within 48 hours of application, allowing developers and CRE investors to move quickly on opportunities. This rapid access to funds gives them a competitive edge, enabling them to work on multiple deals simultaneously without being constrained by liquidity. Additionally, by increasing their deposit amount, real estate professionals can strengthen their position in competitive bidding processes, improving their chances of winning high-value deals.

Market Impact

The response from the development community has been significant. Developers are using DuckFund’s solution to simultaneously pursue multiple opportunities that would have been impossible under traditional capital constraints. This multiplier effect is particularly valuable in competitive markets where the ability to move quickly on multiple deals can significantly impact a developer’s growth trajectory.

For many developers, this new approach to EMD financing has fundamentally changed their growth strategy. Rather than limiting their pipeline based on available earnest money capital, they can evaluate opportunities based purely on their merit, knowing they have a reliable solution for the EMD requirement.

Looking Ahead

DuckFund’s success with their innovative EMD solution has opened doors to broader opportunities in the commercial real estate capital stack. The company is actively exploring partnerships with equity funds to expand their service offerings, acknowledging the wider range of capital challenges developers face beyond just earnest money deposits.

“Our vision extends beyond EMD financing,” Kogan shares. “We’re looking at ways to help our clients address the full spectrum of capital needs in commercial real estate development.” This expansion comes at a crucial time, as developers increasingly seek flexible financial solutions that preserve their liquidity while pursuing multiple opportunities.

As competition for prime development opportunities intensifies, DuckFund’s innovative approach could well become the new standard for how developers approach not just EMDs, but a range of capital deployment challenges in commercial real estate.