Investment opportunities come and go but not being able to bring a project to completion due to a lack of funding can and will have a crippling effect on an individual or company’s reputation in their particular area of business. Other potential downfalls include not being able to commit to a known and certified home-run project if funding is not available or having to watch another group or investment firm make a blockbuster deal that could have been yours. If only you had acted sooner or knew of available options for financing, then it would be you or your company reaping the benefits as opposed to seeing others share in the glory while you are relegated to finding another far less exciting or financially beneficial opportunity.
Commercial real estate can at times be a risky business but informed decisions, properly managed, and appropriated funds can also provide a world of potential wealth for multiple people involved in many parts of the process. Securing the necessary funding in order to complete a project, often with a required quick turnaround timeline is one of the most important aspects of purchasing.
When dealing with commercial properties, especially those that have been vacant for an increased amount of time, investors want someone who can almost immediately provide a vital money producing product or service within their walls. These often necessitated turn around times for closing can limit the options for where to turn for financial backing and this is where hard money lenders and bridge loans in particular, fit into the overall picture.
Bridge loans are funds provided to individuals in an effort to cover the time between purchasing and the reselling of a property. When this happens, the needs for transactional financing increase and can often be unattainable, which instead of shutting the door on a potential deal can be circumvented with the use of a bridge loan provided by a reputable hard money lender.
Funding is provided quickly, efficiently, and without much of the hassle typically employed by other more traditional routes.
Bridge Loan - Minimal Renovations Required
In the scenario referenced above, a bridge loan applies best when in need of the funding between an initial purchase and then the selling of a property for profit. In lieu of flipping the investment, where a property is bought low, extremely renovated, and then sold at a much higher value, these commercial buildings in need of less improvements can be financed via a different avenue. Bridge loans close the gap, which is often far less than a flipped property, for a brief amount of time and are then relinquished when the building is sold.
The building’s needed minimal improvements are required but allow for the commercial property to be transitioned without swallowing an enormous amount of cash. This move, financed through a hard money lender, allows the property to be sold or occupied at a faster rate. Unloading a property quickly is always a positive, but especially when reaping a significant profit from only a short-term investment.
Bridge Loan - Traditional Financing Failure
If a project is being funded through a traditional financing method
similar to ones like small business loans, venture capital, angel investors, public or privately funded grants there are concerns the deal may not come to fruition for a variety of differing circumstances. If this is the case, then a bridge loan could provide a means of solidarity for the short time period between a failed investment and the potential resale of the property. A bridge loan acts as a band aid due to any mishap which potentially could occur with traditional funding measures.
Bridge Loan - Bank Note Due
Issued by the bank and payable to the bearer on demand, a bank note coming to be called upon can cause an immediate loss of funds previously expected to be available for use. If this were to occur, then a short-term loan could potentially fill any void almost immediately. A somewhat flexible loan in terms of application, bridge loans can be extremely beneficial when applied appropriately depending on the individual circumstances surrounding any given situation.
Bridge loans assist by being able to provide the solution for a timely problem while a more resolute long-term financial procedure can be established and instituted. When dealing with commercial properties and the often multiple entities involved with any given project, having viable financial solutions readily available is a positive for boosting one’s reputation within the industry or among a particular business field. By acting almost exactly as they are named via reference, a bridge loan helps to cover any gaps in financing either through a break or just for immediate renovation prior to a sell or rented occupancy.
Don’t let your individual financial situation keep you on the sidelines the next time you’re up at the plate and know the right investment is now available. Instead of letting it pass, create the opportunity by opening the doors of a financial backing through the appropriate methods and means that can be related to almost any circumstance you can imagine.
Come see the experts at COHI Capital Private Equity Lending
who are offering a free evaluation of your situation and can assist you in determining your needs or set up a beneficial individual plan immediately. Often appraisals of the property in question are not necessary as our team works with each applicant to assess the building’s current value. Loans can range up to $3 million and 24 months with lending ranges up to 70-percent of a properties present value when applying a bridge loan. COHI Capital Private Equity Lending experts will decide what type of loan will work best for you after finding successful funding needs in over a decade of service to the local community. A full detailed review of your exact financial situation and need can be completed in addition to resolution issues and probable monetary considerations. Request any additional needed information by contacting COHI today. Call 970-922-3277 or contact us
for a decision or for the free evaluation. Often these decisions can be made the same day and then be addressed depending on a client or applicant’s needs and schedule.