Commercial Real-Estate Bridge Loans
Commercial bridge loans are a short-term financing solution that’s widely used within the real estate industry. House flippers, real estate developers and real estate investors all use these loans to “bridge” a gap when purchasing or renovating a wide array of properties. Even businesses in other industries may take out a commercial real estate bridge loan if they purchase a new property.
These loans are a type of “hard money loan,” for they’re secured by tangible property (i.e. real estate). Because of the short time frames of these loans, they’re sometimes also referred to as “swing financing” or “gap financing” for real estate.
Commercial Bridge Loan Terms
Eligible Properties: | Retail |
Loan Amount | Minimium 2,000,000 and up |
Interest Rate | 7% or Higher over index |
Loan Term | 12 months 36 months. Extensions are possible |
Amortization | Generally Interest with some exceptions |
Loan To Value | Up to 80% |
Recourse | Non-recourse except industry-standard “bad act” carve-outs. |
Prepayment | Generally no prepayment penalty |
Loan Exit: | We will place you in permanent solutions such as Fannie Mae, Freddie Mac, FHA, or CMBS loan |
Commercial Bridge Loan Pros
Loan amounts determined by total project cost.
Fast closing process.
Available when other lines of credit are not attainable.
An alternative to permanent financing.
Allows for recapitulation at stabilization
Commercial Bridge Loan Cons
Higher rates.
Very high rates if financing is for financial, legal or credit issues.
Loans are short term and generally need to be refinanced inside 24 months.
