Financing your property development projects calls for a plethora of options when it comes to securing properties and completing builds. Because traditional loans can take a long time to secure, with plenty of hoops to jump through, many investors look for support with private lenders which can offer more personalized, faster-moving financing. Among those options which you may consider is a Bridge Loan. Need to know more? Let’s explore exactly what a bridge loan is and how one can help you achieve your goals.
In the most basic words, a bridge (sometimes called a commercial bridge) loan derives its name from its primary function – providing a bridge between your initial payments up front and securing a long term loan farther down the line. Bridge loans are awarded in a different manner than traditional loans, as bridge loans are leveraged against the value of the property in which you intend to begin a project instead of your personal or institutional collateral. While most applications of a bridge loan involve securing financing as a mediary step to traditional financing, these same loans can be applied to existing debt which you may need to pay off before starting on a new project.
The most significant appeal of a bridge loan is the ability of your private lender to provide the funding quickly – in most instances, you will receive your funding within 30 days. Because a private lender’s focus is on the value of the property relative to the amount of the loan and note on your financials there is less assessment to be done – allowing you the ability to close quickly on your property. The speed with which you can obtain a bridge loan can also save you significantly on interest accruing on loans from previous projects which you may need to pay off.
Property owners that have a vacant apartment or commercial building may consider a bridge loan to stabilize the property and then look to their bank for a long-term loan. Traditional lenders do not favor vacant buildings without a current income stream, whereas a private lender can take the risk knowing there is a solid strategy in place.
Does a bridge loan sound like the right fit for you and your projects? EMCAP lending offers a variety of opportunities for developers to finance their projects, including bridge loans. We offer loan terms up to 18 months (and the potential to extend if needed) with loan payouts as soon as 7 days from the time of your application. If you’re in need of a stop-gap loan before landing your traditional financing, consider one of EMCAP’s bridge loans.
To learn more or start your application today, please contact us. We offer financing up and down the east coast and look forward to seeing your project succeed!