Applying For A Commercial Bridge Loan

So you’ve decided that short-term financing is the best option for your new construction or upcoming investment. But, you’ve never applied for a commercial bridge loan before—no worries let’s go over the basics.

Applying for a commercial bridge loan is not necessarily any different than applying for any other kind of commercial loan. In other words, you still need the right documentation and a lender that understands your particular business needs or market. Thus, if this is not your first commercial loan, which it more than likely is not, you’re in luck. You do not have to lose sleep over narrowing down your short-term financing options.

With that being said, it may be more beneficial for you to focus on why a commercial bridge loan is right for you next project. For instance, say you already have an investment property or two underneath your belt and you are looking to make a few upgrades or improvements. If this scenario sounds familiar to you, then great! This is exactly the time for a short-term financing. Generally,  you can be approved for this particular loan if your new construction will take some time but will not exceed three or more years depending on your specific market( hint: construction that takes longer than three years, in general, is not a little upgrade).  In fact, non-residential bridge loans can be for a small time period of say two weeks or you if you go with a more traditional lender you may find bridge loans that range from 45 to 60 days.

Ultimately, when you start talking about years’ worth of upgrades you may want to rethink your need for short-term financing. However, it is important to note that you may be able to find a lender that offers what is known as bridge-to-permanent programs. These particular kinds of programs can make the transition from short-term financing to long-term financing more seamless (for a price of course).

                                  

Is a Bridge-to-Perm Loan a Win-win Solution?

Yes, in many ways a bridge-to-perm loan is a win-win solution, especially if you are not necessarily interested in taking the time to secure more financing or possibly work with another lender all together. The fact is it is often a lot easier to stay with the lender or bank you know. Thus, if you are currently working with a lender or bank that offers such programs, it would definitely be in your best interest to check out a bridge-to-perm loan programs or two.

Not to be confused with a Mini-Perm loan

As a side note, it is also important to understand that a bridge loan, a bridge-to-perm loans and a mini-perm loan are different from one another in what they ultimately offer. At this point, you probably are clear on the first two kinds of loans and what they can do for your commercial venture. Thus, the last thing to cover is what a mini-perm loan offers. A mini-perm is still a first mortgage on an investment property for mainly construction, but the terms of the loan differ i.e. typically this is a bank loan  that covers a  two to three years  period and it can either be an interest only loan or an amortized loan.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

NMLS 1057378 | AZMB 0923961 | MLO 1057378
22601 N 19th Ave Suite 112 | Phoenix | AZ | 85027

111 Congress Ave |Austin | Texas | 78701    

   

About the author: Dennis has been working in the real estate industry in some capacity for the last 40 years. He purchased his first property when he was just 18 years old. He quickly learned about the amazing investment opportunities provided by trust deed investing and hard money loans. His desire to help others make money in real estate investing led him to specialize in alternative funding for real estate investors who may have trouble getting a traditional bank loan. Dennis is passionate about alternative funding sources and sharing his knowledge with others to help make their dreams come true.

Dennis has been married to his wonderful wife for 42 years. They have 2 beautiful daughters 5 amazing grandchildren. Dennis has been an Arizona resident for the past 40 years.