Start with the term, because people use it loosely. Strictly, transactional funding is capital that pays for the first leg of a double close, from the original seller to the wholesaler, and is repaid out of the end buyer's funds in the same closing session for a flat fee. Loosely, you'll hear anything short and fast called transactional funding, including 30 day bridge money. Those are different risks and different prices, so pin down which one someone means.
On licensing, "business purpose so no license" is a rule of thumb, not the law. Some states license anyone who makes loans secured by residential real property regardless of purpose, some have exemptions that turn on how many loans you make in a year, and duration doesn't get you out of a licensing statute. This one has to come from an attorney licensed in the state where the property sits, and the answer can differ if you fund across state lines.
Overhead is genuinely thin. A note and a mortgage or deed of trust drafted for you by that attorney, wire fees, an entity if your attorney advises one, and a relationship with a title or escrow company willing to handle a same-day back-to-back. Most people track the deals in a spreadsheet. Your protection on the A-B leg comes from a title policy and a recorded lien rather than from any insurance product you buy separately.
The part that decides whether you get repaid isn't the wholesaler at all. It's the escrow officer confirming the end buyer's funds are in the account before your money leaves. Meet that person before you fund anything.
