Commercial bridge loans are defined as a short-term loan arrangement that gives the borrower flexibility. Bridge loans are granted to property owners that need to sell or refinance. This type of loan is considered interim funding. It can also be used if you want to buy a commercial property that needs extensive work.
Other Purposes Of Commercial Bridge Loans
There are a few other reasons why you might need to obtain a commercial bridge loan. One of them is if you need a loan in a hurry and you can’t secure permanent financing. Another is if your credit is not high enough to obtain any other type of loan, and a third one is if the property in question has occupancy rates that have been deemed unsatisfactory.
In most cases, you have from six months to three years to pay commercial bridge loans off. If you fail to pay the loan off in time, the property is refinanced permanently or sold to a new owner.
Types Of Commercial Buildings Bridge Loans Cover
You can use a bridge loan to purchase an apartment complex, office building, multifamily housing, hotels, and retail properties. But you can also use this type of loan to purchase land if you intend to use the land for commercial purposes. The land can be undeveloped or it can include structures that need to be destroyed and rebuilt in order to be used.
When you close on a commercial bridge loan, the process is completed quickly. The amount of the loan you get is based on how much the property will be worth after the remodeling is done.
You are allowed to use this loan to obtain a property you have no plans to occupy, making it the perfect choice if you are buying a commercial property in order to make an income off of it. This makes it the perfect loan to get if you flip houses and then resell them.
Embarking on the process of buying and renovating a commercial property can be overwhelming and confusing. For help and guidance with bridge loans, please make an appointment with Park Cedar Commercial Lending.