Commercial Bridge Loans
Every investor in commercial real estate needs to consider borrowing money at some point. Although traditional long-term loans are the go-to source for capital, they may not always be the most suitable option for commercial real estate loans. Investors and developers use short-term bridge loans to raise capital quickly, with loan terms customized to the borrower's needs.
Lenders look at the borrower's lending requirements and custom tailor the bridge loan according to the borrowers needs.
While the interest rates and other associated fees are usually higher than conventional loans and mortgages, the time it takes to get approved for a bridge loan is much faster than a conventional loan with a lot more flexibility on the lenders' behalf.
A commercial bridge loan will typically have a loan-to-value (LTV) that is between 65% and 80% of the appraised value of the property. A lender typically uses the loan-to-cost method (LTC) for renovations, which takes into account capital expenditures.
Bridge loans for commercial properties:
Bridge loans offer flexibility to borrowers' short-term needs, spanning anywhere from three months to three years.
Bridge loans can help in scenarios where borrowers need time to decide about the future of an investment or an asset.
Examples of clients having used bridge-loans are:
Let’s say you have found the perfect property and don’t want to risk losing it to other buyers and bidders, this would be a perfect scenario for you to acquire a bridge loan. Bridge loans allow you to seize an opportunity to acquire a property right away.
A commercial bridge loan could also help you with the time it takes to sell a property, you would not have to wait to sell your current property in order to purchase a new one.
Commercial bridge loans have the following benefits:
Since Bridge loans are funded a lot faster than traditional loans, they are an ideal short-term funding solution.
During the loan term, an effective bridge loan will enable the borrower to increase the loan balance to pay for capital improvements, tenant improvements, or leasing commissions. Unlike traditional loans that fund all proceeds in an up-front lump sum, borrowers can access additional funds as needed. This minimizes interest payments.
Commercial bridge loan advantages are:
Commercial bridge loan disadvantages are:
At Toronto Private Mortgage we work with some of the most reputable lenders in all of Ontario. We have a history with our lenders which enables us to negotiate the most favourable rates and terms for our clients. We stand behind our clients until we have met and exceeded all of their needs. We guarantee that the rates we can offer are exclusive to our lenders relationship with us. Let us help you enter a better tomorrow.
If you're denied for any reason, don't hesitate to reach out - we'll work with you and come up with the right plan in 48 hours!
Lenders look at the borrower's lending requirements and custom tailor the bridge loan according to the borrowers needs.
While the interest rates and other associated fees are usually higher than conventional loans and mortgages, the time it takes to get approved for a bridge loan is much faster than a conventional loan with a lot more flexibility on the lenders' behalf.
A commercial bridge loan will typically have a loan-to-value (LTV) that is between 65% and 80% of the appraised value of the property. A lender typically uses the loan-to-cost method (LTC) for renovations, which takes into account capital expenditures.
Bridge loans for commercial properties:
Bridge loans offer flexibility to borrowers' short-term needs, spanning anywhere from three months to three years.
Bridge loans can help in scenarios where borrowers need time to decide about the future of an investment or an asset.
Examples of clients having used bridge-loans are:
- Change in ownership of property
- Deciding about the future of a property
- Waiting for traditional financing
- Need immediate funds to purchase new property
- Having a low credit score
Let’s say you have found the perfect property and don’t want to risk losing it to other buyers and bidders, this would be a perfect scenario for you to acquire a bridge loan. Bridge loans allow you to seize an opportunity to acquire a property right away.
A commercial bridge loan could also help you with the time it takes to sell a property, you would not have to wait to sell your current property in order to purchase a new one.
Commercial bridge loans have the following benefits:
Since Bridge loans are funded a lot faster than traditional loans, they are an ideal short-term funding solution.
During the loan term, an effective bridge loan will enable the borrower to increase the loan balance to pay for capital improvements, tenant improvements, or leasing commissions. Unlike traditional loans that fund all proceeds in an up-front lump sum, borrowers can access additional funds as needed. This minimizes interest payments.
Commercial bridge loan advantages are:
- Bridge loans are great when quick funding is required
- Lenders that specialize in bridge loans tend to focus on the property itself rather than focusing on the borrowers credit
- Bridge loans are great for purchasing new property without having to sell your existing one first
- Unsecured bridge loans are available to borrowers who qualify
Commercial bridge loan disadvantages are:
- Collateral is usually required, lenders focus on the property being borrowed against
- Multiple properties might be required to be used as collateral
- Bridge loans have higher fees and interest rates
At Toronto Private Mortgage we work with some of the most reputable lenders in all of Ontario. We have a history with our lenders which enables us to negotiate the most favourable rates and terms for our clients. We stand behind our clients until we have met and exceeded all of their needs. We guarantee that the rates we can offer are exclusive to our lenders relationship with us. Let us help you enter a better tomorrow.
If you're denied for any reason, don't hesitate to reach out - we'll work with you and come up with the right plan in 48 hours!