Commercial Mortgage Bridge Loan can be Your Life Saver in Various Situations

Commercial Mortgage Bridge Loan can be Your Life Saver in Various Situations
Commercial Mortgage Bridge Loan can be Your Life Saver in Various Situations
December 27, 2016

In real estate business, you must have gotten to that point where you desperately need cash to close a deal. You realize how profitable this deal is and how you will lose it to your competitor if you do nothing. At such point, what you will need is an interim financing option to make the cash available for the deal.

Real estate business is finance demanding

If you have ever tried to erect a property, you probably would have realized how cash gulping the process can be. Not only that the traditional banks may delay the process of releasing the required funds for the construction to move one, they may also not be able to approve the total amount applied for which will mean that the investor will still need other loan sources to augment what they already have.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

Traditional financing institutions always have a delay in giving out money

If you are in such a tight corner where urgent cash flow is needed, there is a need to seek for finance from alternative sources because traditional financing bodies do not release funds at a guaranteed speed and this may hamper your deal. The delay is because of the huge documents that will need to be approved and signed before loans are approved. Private lenders, on the other hand, particularly bridge loans can guarantee you quick cash flow.

Having a commercial bridge loan can give your real estate a short-term boost

It is noteworthy to mention that commercial bridge loans are short term loans. This loan can be a great boost to unfinished real estate project considering how finance demanding these sorts of projects can be. However, not every investor have a picture of when and how well to utilize the loan. Some of the situations commercial bridge loans can be exploited are mentioned below.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

1. Development of a real estate

If you have a construction project that urgently needs cash to continue and you fail to act fast, the progress of the project may just be halted which may lead to investment loss. However, if you can lay your hand on a commercial bridge loan, it can help you to run the project without interruption and meet your financial obligations.

2. Investment in real estate

Assuming you have a commercial property to sell and but by the side, there is another profitable property to be bought but you can only pay for the new property only when you sell your old one. With looming deadline on the new property, you need not think it twice to take up a commercial bridge loan to pay for the new property. Hence, you will have bought into a new investment irrespective of what happens to your property.

Read also: What You Never Knew about the Small Business Administration Loans

3. Holding onto a real estate business

Continuity in a business is as keen as a success. A small business that lives up to ten years can be rated as being more successful than a big business that booms in two years and folds up. When one business partner decides to pull the plug in a real estate business, it may be particularly difficult for the rest to continue. In this scenario, a commercial mortgage bridge loan can provide the necessary backup for the real estate business to move on.

Work with a financial adviser to get the best out of every loan

Now you know how a commercial bridge loan can fit into your real estate plans. However, it is not enough to take bridge loan if you have not taken the time to consult your financial adviser to make sure the loan will be of great benefit to the project.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • Real estate investment is usually finance demanding.
  • Traditional lenders may not be able to provide a loan at a speed that beats a deadline.
  • A commercial bridge loan can help the continuity of a real estate business.
  • You need to consult your financial adviser before taking a loan.
  • Commercial bridge loans are short term loans.
  • Commercial bridge loans are alternative forms of financing.
  • Traditional lenders may not be able to provide the exact amount requested.
  • The halting of your project can be saved using commercial bridge loans.
  • New investments can be made using commercial bridge loan.
  • Continuity can be used to rate the success of a business.

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