Some Fast Facts About Commercial Bridge Loans
As you know by now, there are different kinds of commercial loans that you can choose from. Like most potential candidates for a commercial loan, it is essential that you gather as much information about the commercial loan that you will be applying for. This page will talk to you about commercial bridge loans. This is one of the most commonly acquired commercial loans for a lot of individuals and companies for a lot of reasons.
Assets America commercial bridge loan basically serves as interim financing. This type of loan is often used to close a commercial real estate property. It is also used for the short-term and usually to save any commercial real estate property from foreclosure. Compared with other commercial financing options like C&I loans, bridge loans are more expensive. The reason being that they are riskier in comparison to conventional commercial loans.
When you say commercial bridge loan, it is the use of funds rather than the source of funding or the transaction guidelines that are imposed. In some regard, you can say that all commercial loans can be bridge loans. But then, the concept is often associated more with programs that fall under the unconventional category of financing. For instance, if the lender does not have enough cash equity to acquire a business property, he or she could apply for a commercial loan with a 15 percent interest rate and move up from 3 to five points. Nonetheless, if the lender will be able to make as much as 30 percent of their down payment, they can qualify for a conventional mini-perm loan that is provided by a bank with about one point and 3 percent over prime.
In terms of interest rates, commercial bridge loans offer you between 12 and 15 percent interest rate. Usually, the terms last for a good 12 months. And the points that can be levied can start from two to four points. The loan to value or LTV rations usually does not exceed 65 percent for the properties that have been categorized for commercial use. Look for more information about loans, visit https://en.wikipedia.org/wiki/Loan.
Getting the first charge for your commercial bridge loan is made possible when you have a higher loan to value ratio. This is in comparison to getting a second charge loan. The reason is that the risk involved will now be lower. Usually, commercial bridge loans may be closed and will only be made available at a predetermined timeframe. On the other hand, they can also be open, meaning a fixed payoff date is not yet ascertained. For the latter, the payoff is mostly set at a certain time period. Get more info.