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What You Need To Know About Bridge Financing

At some point every commercial real estate investor, owner or developer runs into capital or funding issues. While traditional long-term loans are the go-to source for capital, they’re not always the best choice for a commercial loan.  Some situations may not qualify for more traditional loan programs. So…

THE QUESTION:  What financing option is there? 

HINT:  It gets its name because the loan acts as a temporary bridge when a property is in a transitory phase.

The ANSWER:  Commercial Bridge Loan – this is an alternative lending source when either a sponsor or property may not meet underwriting requirements for more traditional lending. The financing fees and interest rates tend to be higher than a traditional loan, but funding is faster and the loan terms and conditions are more flexible.

USES OF CRE BRIDGE LOANS:

  • acquire a commercial asset
  • buyout a partner
  • do a cash-out refinance
  • purchase or make improvement to an underutilized commercial property
  • for businesses looking for space to operate out of (owner-occupied)

PROPERTY TYPES FINANCED:

  • Multifamily
  • Office
  • Self-storage
  • Mixed-use
  • Retail
  • Industrial

PROS OF BRIDGE FINANCING

  • quick access to capital
  • flexible terms
  • typically interest-only

Bridge loans can be an effective tool to invest in more properties to grow your portfolio.

Kyle Altenau is the Vice President of Progress Direct, a direct bridge lender providing real estate owners and investors with short term solutions to their capital needs. For more information visit https://progresscapital.com/progress-direct/

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