Bridge The Gap: Short-Term Funding for CRE Investors

Commercial Bridge Loans are short-term financing solutions designed to bridge a financial gap for investors. These loans serve as a temporary source of capital, often used to facilitate real estate transactions or provide working capital until a more permanent financing solution is secured. The term “bridge” reflects the loan’s role in bridging the financial divide between a company’s immediate needs and its long-term funding goals.

  • Loans Amounts from $1M to $75M
  • Term: 1-3 Years with Extension Options
  • Maximum LTV 75%
  • Generally Non-Recourse with Standard Carve-Outs
  • Purchase New Property Before Selling Existing
  • Typically Interest-Only Payments
  • Funding a Business Expansion
  • Complete Renovations for CRE Property

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Our advisors can help qualify your property and recommend programs that can best meet your needs.

Bridge Loans for Multifamily Apartments

Renovations and Repairs:  Does a your property needs significant upgrades to attract new tenants or improve rental rates?  A bridge loan can cover the renovation costs while the increased income from the upgraded units helps repay the loan.

Refinancing Gap: If you’re looking to refinance your existing mortgage on the property, there might be a gap between the payoff amount of the old loan and the new loan disbursement. A bridge loan can cover this gap and avoid any disruption in your cash flow.

Unexpected Expenses: Emergencies happen, and even well-maintained properties can require unforeseen repairs. A bridge loan can provide the funds to address these issues without derailing your overall investment plans.

Bridge Loan for Multifamily Apartments
Bridge Loans for Commercial Real Estate

Benefits of Bridge Financing

Faster Approval and Funding Process: These programs have a faster approval and funding process than traditional loans, which can be helpful if you need the money quickly.

Lower Down Payment Requirements: Bridge loans often have lower down payment requirements than traditional loans, which can make them more accessible to borrowers with limited equity.

More Flexible Repayment Terms: Investors can receive more flexible repayment terms than traditional loans, such as interest-only payments or deferred payments. This can be helpful if you need to conserve cash flow during the bridge loan period.

Things To Consider Before Taking Out Bridge Loans

  • Higher Interest Rates: Bridge loans are typically more expensive than traditional financing due to their short terms and higher risk for the lender. Interest rates can vary depending on the lender, loan amount, and property details.
  • Loan-to-Value Ratio (LTV): Lenders will only loan up to a certain percentage of the property’s value (LTV). This ratio is typically lower for bridge loans compared to permanent financing, meaning you might need a larger down payment.
  • Exit Strategy: A critical factor for bridge loans is having a clear exit strategy. This outlines how you will repay the loan within the short timeframe, often by securing permanent financing or selling the property.

Bridge Loans for Apartment Investors

Commercial bridge loans play a vital role in facilitating time-sensitive investments, particularly in multifamily real estate. Their quick approval and flexible terms make them a valuable tool for investors who need short-term capital to seize strategic opportunities.

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