Bridge Loans

Bridge loans are a type of short-term financing that can be used to fill the gap until a desired outcome is achieved. They are usually short-term, ranging from 6 months to 3 years, and have a higher interest rate to compensate for the risk taken on by the lender.

Once the property is sold, refinanced, improved or specific changes have occurred that allow for permanent financing or a sale, the bridge loan is repaid. They can be used for a variety of purposes such as quick purchases, property improvements, REO purchases, refinancing of notes that are due, lease-up periods, partnership buyouts and other unique situations.

They offer many benefits such as fast closing, minimal documentation, no prepayment penalty and an asset-based analysis. The bridge loan is evaluated based on the overall deal, taking into account both the asset and the borrower’s qualifications.