The primary source of commercial bridge loans is private mortgage lenders.
There are two basic categories where a commercial loan for bridge financing would apply with category one being for the direct financing of land for purchase or refinancing of an existing mortgage, and category two being where a commercial mortgage is registered against a property in first or second position to pull out a certain amount of equity for some unrelated purpose.
In both cases, the amount of funding required is only for a short term, either to complete a transaction or buy time until a cheaper form of financing from a bank or institutional lender can be secured.
In many cases, a commercial bridge loan may not just be the best option available, but the only one available in the time period you have to work with.
Commercial property from bare land, partial construction, to completed real estate assets can be used for security for bridge financing, keeping in mind that the less developed the property, the lower the lending amount as a percentage of the property value will likely be.
For a private mortgage lender, the keys to bridge financing is quality and amount of equity offered as security, and the plan for repayment of the loan at the end of the commercial bridge financing period.
Private money sources can provide commercial bridge loans from as low as $100,000 to as high as $10,000,000. Sources for larger deals will be fewer as most private lenders work in a funding range below $2,000,000.
The key benefit of commercial bridge financing is the ability to get a certain amount of funding into place within a defined period of time. Many times with commercial properties, banks and institutional lenders can take considerable time assessing the deal which may take longer than the time you have to work with.
A private mortgage commercial loan will typically take much less time to get approved with funding to follow shortly there after.
While private money typically is going to cost more than a bank or institutional bridge loan, lower cost money won’t do any good if it can’t be put in place in a timely fashion which typically is a requirement of a commercial bridge financing transactions.
If you need to secure a commercial bridge loan or want to know more about your potential options for commercial property financing, I suggest that you give me a call so we can go through your requirements in detail and then discuss different approaches you can take to secure commercial bridge financing.
I'm a Toronto Mortgage Broker that arranges mortgage solutions on residential and commercial real estate property. With over 30 years of mortgage financing experience, I'm able to quickly assess your financing requirements and provide relevant solutions for your immediate consideration. Joe Walsh Google+ YouTube Channel