loan is an immediate, short-term loan, one to sixty months,
usually made in anticipation of intermediate or long-term
financing. Pay back the bridge when permanent financing
is in place with no prepayment penalties .
loans "bridges" two different types of cash gaps.
The first "bridge" is a loan that institutional
banks refuse to approve. The second "bridge" is
for the individual investor or company who is between deals
and requires immediate, short-term funding until a traditional
loan is issued.
Bridge lenders only use private capital. "Loan Committees"
are comprised of one or more principals. This creates an
efficient and expeditious decision-making atmosphere that
enable lenders to quickly perform their due diligence and
fund loans as quickly as in seven business days.
An owner of a $2,600,000 office building in excellent condition,
with a good positive cash flow, needs $800,000 to pay the
IRS within 15 days. He is willing to sell this property
for $800,000 down to pay off the IRS. The prospective buyer
is property rich but cash poor, and cannot raise this amount
of cash within this time period through conventional means.
To take advantage of this very narrow window of investment
opportunity, the buyer obtains the $800,000 bridge loan
within 10 days to quickly secure property title. The buyer
then paid back the $850,000 within 30 days with no prepayment
penalties when loans from conventional sources came through.
Loan Amounts: $250,000 to $35,000,000 in all 50 states and
some foreign countries. Credit Ratings: Will consider any
credit rating: A+ to D, including bankruptcy. Amount of
Loan: Up to 65% of property value. Minimum Down Payment:
As little as 5% or 10% if seller carries a second mortgage.
Terms: 400 plus basis points over corresponding U.S. Treasury
index. This is subject to credit rating, location, type
and condition of property. Loan Quote: 2 business days or
less. Speed of Loan: Loans are issued as quickly as 7 days