Financing

How to verify a private money lender's proof of funds

When using private money, it is important to confirm your lender actually has the funds he or she claims. You should ask for a recent bank statement or a letter from their bank, but always verify the information directly with the issuing institution. This is not financial advice.

October 16, 2026 · 3 min read

Why verify proof of funds?

Before you commit to a deal relying on private money, you need confidence that the funds are actually available. A lender who cannot deliver on his or her promise can kill your deal and damage your reputation.

Verifying proof of funds protects you from wasting time on a lender who might be overststating his or her capabilities. It allows you to move forward knowing your financial backing is solid.

This check is part of your due diligence on the money side. Just as you vet a property, you need to vet your capital source.

What kind of proof of funds to ask for

The most direct proof is a recent bank statement showing the necessary liquid funds. Ensure it is current, ideally within the last 30 days.

Another option is a letter from the lender's bank, signed by an officer, confirming the availability of funds. This letter should explicitly state that the funds are available and unencumbered for the specific purpose.

Avoid relying on screenshots, online portal views, or generic letters without specific bank contact information. These are easily faked and do not provide sufficient assurance.

Looking for red flags in documentation

Examine any document carefully for inconsistencies or signs of tampering. Look for misspellings, unusual fonts, or blurry text that might indicate a doctored image or document.

A common red flag is a proof of funds that is generic and not addressed specifically to you or the property. Legitimate documents will usually show some level of specificity.

Be wary of documents that provide only an email address or a mobile number for verification, rather than an official bank phone number. These can easily lead to a confederate rather than a genuine bank representative.

Direct verification with the institution

The most reliable verification involves contacting the issuing bank directly. Use a publicly listed phone number for the bank, not one provided on the proof of funds document itself.

Once you reach the bank, ask to speak with someone who can verify the letter or statement. Be prepared to provide the account number (if available and you have permission) or other identifying information from the document.

You might not get specific account balances due to privacy laws, but the bank can usually confirm if the letter is legitimate and if the stated funds were available on the date the letter was issued. Remember this is not financial advice.

What to do if verification fails

If you cannot verify the proof of funds, or if you encounter resistance or suspicious behavior, consider it a major red flag. It is usually best to walk away from that lending relationship.

A lack of transparency early on signals potential problems down the line. It is better to find a different lender than to risk a deal falling apart due to unavailable funds.

Keep records of your attempts to verify. This documentation can protect you if issues arise later or if you need to explain why you changed lenders. /for/new-investors

Questions people ask

Why would a private money lender show fake proof of funds?

Some individuals may try to appear more credible or experienced than they are to gain access to deals. They might also be trying to secure a deal without having the actual capital in place, hoping to find it later.

Can I accept a screenshot of an online banking account?

It is not recommended. Screenshots are very easy to manipulate. Always ask for an official bank statement or a signed letter from the bank, and then verify it directly with the bank using their public contact information. /learn/what-is-a-motivated-seller-lead

What if the lender refuses to provide verification?

If a lender refuses to provide verifiable proof of funds or becomes defensive, it is a significant warning sign. Without proper verification, you should assume the funds are not secure and look for another funding source. /for/wholesalers