Picture this: You’re in the process of arranging long-term financing for your next purchase or renovation project, but the perfect investment opportunity just came on the market today.
Or, you are trying to sell a current property, but it’s taking longer than expected and you need immediate funds in order to purchase the next property.
These situations call for what’s known as a commercial bridge loan, gap financing, or swing financing.
A typical bridge loan “bridges the gap” between the financing you’re in the process of acquiring, and the funding you need immediately.
No lender understands this type of financing better than a private money lender, who navigates these types of deals with investors and business owners regularly.
Let’s take a look at what commercial bridge loans are, how they work, when to use one, and how to get one with a reputable hard money lender.
What’s your loan scenario?
What is a commercial bridge loan?
Bridge loans are a type of short-term financing that usually stretch from a few months to a year.
Consumers can use bridge loans to bridge the gap between a sale and purchase of a home, or to put a down payment on their new home, but bridge loans also are frequently used for business or investment properties.
Marquee Funding Group offers both loan options. We can lend up to 70% of the combined value of any two, three, or more properties while keeping existing conventional loans in place.
A real estate investor or business owner may decide to use bridge financing for any of the following purposes:
- Purchase a new property immediately
- Renovate a property
- Access capital during acquisition
- Stock up on inventory
- Other expenses
All scenarios require fast access to cash to keep deals moving.
Traditional financing such as banks often have the ability to structure commercial bridge loans, but you’ll have to meet strict requirements and the timeframe will likely not work for time-sensitive deals.
Banks can take several weeks or more to approve funding for commercial bridge loans. By that point, you may have missed your opportunity.
That’s where private money lenders come in. Let’s take a look at how commercial bridge loans work with a private money lender.
How do commercial bridge loans work?
Private money, or hard money, lenders approach commercial bridge loans much differently than banks.
For starters, they can make instant approvals, and the decision to lend is based on the value of your properties over most other factors.
Hard money lenders are able to use any singular real property or combination of properties to get their borrowers the leverage they require for their bridge loan needs.
If you are selling a property to acquire the funds, Marquee Funding Group can take a first, second, or third position on the departing property, while taking the first on the new purchase.
By using both properties as collateral — the departing and new properties — for one loan, Marquee can give borrowers a short-term loan to purchase the new property with enough time to sell the departing property.
If you’re securing permanent financing another way, Marquee’s experienced lenders can structure the loan accordingly. Our team specializes in complicated, unique lending scenarios that banks won’t consider.
We are interested in the value of your current and future properties, as well as how you plan to use and pay off the bridge loan.
When to use a commercial bridge loan
The most common use for a commercial real estate bridge loan is to immediately purchase an available property when you don’t currently have the funds.
In the business and investment world, this is a common occurrence.
Maybe you’ve been wanting to expand your business when suddenly the perfect property pops up. Or you’ve been seeking that next great investment property or renovation project when it finally comes on the market.
Our plans often don’t align with what’s available on the market, which is why it should be easy for business owners and investors to secure immediate funding when these instances occur.
The right lender understands these situations personally, and has years of experience to expertly structure the type of loan that matches your unique scenario.
Commercial property types you can purchase with a bridge loan include retail stores, office buildings, mixed-use properties, restaurants, or multifamily properties such as an apartment building.
Besides property uses, bridge loans also can offer borrowers instant cash flow for business purchases. The idea is that you will have access to funds to pay back the loan in the near future — you just don’t right now.
How do I get a commercial bridge loan?
To get a commercial bridge loan, you have to connect with an experienced, trusted hard money lender who understands your unique situation and Marquee Funding Group is the place that can deliver.
We offer:
- Simple application process and underwriting
- Closing in as fast as seven days
- No limit to the number of loans per borrower
- Flexible lending requirements
- Loan amounts from $50,000 to $20 million
- No income documentation when exit strategy can be verified
We are more interested in the overall merits of the deal and building a relationship with our borrowers than we are in ticking off strict requirement boxes.
If you’re interested in getting a commercial bridge loan, submit your loan scenario to our team today for quick review.
If you’re unsure if you have a deal, just give us a call and talk to one of our experienced lenders about your unique situation.
Image by dashu83 on Freepik