Commercial Bridge Loans
“Commercial Bridge Loans Secured By Real Estate Property Mortgage”
Commercial bridge loans are available via first, second, or third mortgages registered on real estate.
Common situations where commercial bridge loans are required is when:
1) a property purchase needs to be closed quickly
2) mortgage refinancing is required that cannot be completed with a bank or institutional lender in the time available
3) cash flow is required to cover off growth or provide for unexpected costs.
In all cases, a bridge lending situation has a defined beginning and end period, the amount of financing and its usage are clear, and the exit strategy for repayment of all advanced funds is well understood and accepted by the lender.
The reality, however, is that most bridge financing requirements do not allow for a lot of time which tends to rule out banks and other institutional lenders as viable sources to consider.
If you have up to 30 days to work with, a sub prime institutional lender can be the best option, especially for deals larger than $2,000,000.
But if the time required to get the bridge in place is 2 weeks or less, a private mortgage is the only likely option that can provide funds in the time required.
Keys To Getting A Commercial Bridge Loan In Place
the number one key to getting bridge financing funded in the time you have to work with is to work with a commercial mortgage specialist that provides this lending service and has the lender net work and track record of successful placements.
Most short term lenders are not set up for a fast turnaround, and its easy to waste several days or a week before realizing that a particular lender is not going to be able to fund you by your deadline.
A commercial mortgage specialist coordinates process with a bridge lender and the lender’s lawyer so that the process can be completed from beginning to end in the shortest time possible.
Bridge Loan Rates And Terms
Bridge lending is going to be more expensive that a conventional mortgage and the cost will also very depending on the equity in the property and if the security registration is in first, second, or even third position.
Because of the limited number of bridge lending sources that are properly set up for a closing in 2 weeks or less from the time you first contact them, you are also playing a slight premium for the speed, but it typically offset by the hard cost or opportunity cost that would be incurred if funds are not available when required.
Most commercial bridge loans are also for a term of one year with partial to fully open repayment at any time. So even if you only end up needing the funds for a couple of months, you do have the ability to repay the loan when capital is available to do so.
The exit strategy is also closely linked to loan repayment so that the lender can be paid out as agreed.
If you’re in need of a commercial bridge loan for purchase, refinance, debt consolidation, construction, cash flow, or some other reason, then I suggest that you give me a call so we can quickly go over your situation and discuss potential financing options that will meet your needs.