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About Texas Commercial Bridge Loans If there’s one thing about commercial bridge loans, it’s the fact these financing alternatives provide a whole lot of convenience for many developers, corporations, and property investors. The reason a commercial bridge loan is so attractive is because of its ability to provide viable financing for a short term. For instance, commercial bridge loans are often used to purchase a property that will be sold quickly after buying or for commercial property that will be refinanced in the near term. However, there’s more to know about commercial bridge loans. About Commercial Bridge Loans The namesake is a pithy description for its use. When short term financing is needed for a real estate purchase, the borrower might have plans to sell it soon thereafter or, to refinance it. It’s called a “bridge loan,” precisely because that is the instruments sole function: to provide financing for a short time for a commercial property between the buy and the next step. This next step is what’s often referred to by lenders as an “exit strategy.” In fact, that’s one part of qualifying for a commercial bridge loan. Here are some helpful things to know about commercial bridge loans: ● Short term capital help. In the typical scenario, a commercial bridge loan is to provide necessary capital for the purchase of a property. For instance, a business owns a stand-alone suite of offices, which is under contract to close. But, settlement day is three months out and the business wants to purchase a different stand-alone suite of offices and does not have the capital to buy it. A commercial bridge loan is the right financing to make the purchase of the other stand-alone suite of offices even though the one owned is not yet officially sold. This provides the money to finance the purchase until the under-contract property is closed and money distributed. ● Rates. Generally, commercial bridge loans are loaned at rates a percentage point or more higher than the going base rate. These types of loans are also generally interest only, because of their short term and since these serve as temporary financing. ● Payment. Since commercial bridge loans are generally interest only payments, the full loan balance becomes due at maturity. The timing is strategic, intended to match the sale or refinance of a commercial property to pay the balance of the bridge loan in-full. ● Term. As indicated, commercial bridge loans are short-term financing, which means in-general, the term is six months. Of course, not all commercial bridge loans are six months, some have different length terms. For help with Texas Commercial Bridge Loans please contact us

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