Bridge Loans
Bridge loans are short-term loans that “bridge” the gap between a real estate transaction and the closing of conventional financing or some other type of financial transaction. This type of loan is most used in commercial applications where a business needs to obtain cash quickly but cannot close a loan with a bank for some period of time. In this scenario, they may use a bridge loan for a period ranging from a few days to a few months until they can secure conventional financing through a bank or credit union.
Borrowers who seek these temporary loans from private lenders generally must pay a premium interest rate and additional points and/or fees for the convenience and will also be expected to put property (usually real estate or machinery) up as collateral in the deal. Some lenders may also issue loans backed by inventory, accounts receivable, or even a simple personal guarantee of the company principles.
A bridge loan is ideal for buyers who prefer to finance the purchase or rehabilitation of their investment property rather than buy outright in cash. Bridge loans are sought when buying, renovating, or rebuilding residential properties. They are often referred to as fix-and-flip loans because the majority of those who take them out do so in order to repair, resell or rent. This type of loan is a short-term “bridge” mortgage lasting up to a year, usually.
About
The Best Lender to Supply Your Financial Needs for Commercial Real Estate or Business Funding
Menus
Services
Get in Touch
- 3001 S. Hardin Blvd. Ste. 110-1070 McKinney, TX 75070
- 469-815-4550
- Info@PatcoCapitalFunding.com
[Copyright] 2024 Patco Capital Funding, Powered by Digital Agency