BRIDGE LOAN: Definition

Bridge Loan Financing

Bridge Loan Financing

A short-term loan that is used until a person or company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term (up to one year) with relatively high interest rates and are backed by some form of collateral such as real estate or inventory.

Also known as “interim financing”, “gap financing” or a “swing loan”.

As the term implies, these loans “bridge the gap” between times when financing is needed. They are used by both corporations and individuals and can be customized for many different situations. For example, let’s say that a company is doing a round of equity financing that is expecting to close in six months. A bridge loan could be used to secure working capital until the round of funding goes through. In the case of an individual, bridge loans are common in the real estate market. As there can often be a time lag between the sale of one property and the purchase of another, a bridge loan allows a homeowner more flexibility.

Contact Us  now about your own Bridge Loan Scenario!

BRIDGE LOAN PARAMETERS

TYPICAL DEAL TERMS:

  • Loan size: $1M – $20 Million
  • Maturity: Up to 3 years
  • Amortization: Typically Interest Only
  • Security: First Mortgage Lien
  • LTV: Up to 80%
  • Interest Rate: 8% – 12%
  • Points: 3% – 7% (net funded)
  • Lockout: 3 – 12 months (No Prepayment Penalties available)
  • Property Type: Multifamily,Retail, Office, Storage, Hospitality, Mixed-Use, Senior Housing, Lodging, Manufactured Housing,   Industrial/Flex, Specialty (All types of real estate considered)

Closing time: 1 week – 6 weeks (varies on different type of properties)

Other Bridge Loans available with different terms mentioned above.

*Loan Size: $15 to $200 million

Please call Roselle Antonic at 239.462.1477 for more information.

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