Commercial Bridge Loan

Commercial Bridge Loans

What Is A Commercial Bridge Loan And Other Frequently Asked Questions

Commercial Bridge Loans allow borrowers interim financing during a non-residential property stabilization, which generally requires improvements of the property condition or rental occupancy rate, until permanent take-out financing is achievable.

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What is a Commercial Bridge Loan?

A bridge loan is a common commercial loan and is your best option for interim financing for multifamily homes, warehouses, retail properties, offices, restaurants, bars, hotels, and other hospitality properties. If you need a loan for working capital or inventory purposes, check out our SBA 7(a) loan options.

What is the eligibility for a Commercial Bridge Loan? Can I qualify for a bridge loan?

While these loans come in all shapes and sizes, certain scenarios are more common than others. Bridge loans can be in first, second or even third lien position and are made with a clear exit plan of how the borrower will pay off the loan. When evaluating a loan amount, bridge loan lenders consider LTV, CLTV and ARV. Many kinds of lenders offer this type of loan, including banks, non-depository lenders and hard money lenders. Because of the variety of options, eligibility is dependent on the individual aspects of each loan.

Commercial Bridge Loans At A Glance

Property Type

Multifamily, Warehouse, Retail, Office, Hospitalty, ALF

Occupancy

Tenant or Borrower Operated Business

Purpose

Purchase, Refinance, Restructure ( inc. Partner Buyout)

Interest Rate

8.49%-10.99% depending on credit check and other variables

Origination Fee

0.5% for every 6 months loan term ( ex. 1.50% if 18 months term)

LTV

Up-to 80% on Multifamily | 70% other type ( subject to FICO & LTV)

Term

Up-to 24-months

Loan Amount

$1,500,000

Maximum Loan Amount (if Principals Foreign Nationals)

$500,000

Minimum FICO

640

Interest Only Payments

Yes

Prepayment Penalty

Junk Fees

Recent Foreclosure

Bankruptcy Permitted

Rehab Funding

Not provided

Lower Occupancy / NOI

Permitted with acceptable Proforma P&L/Rent-Roll (may effect LTV)

LOI Issued

Within 12 hours from initial submission

Borrower

LLC, Corp, Partnerships (no individuals)

*eligibility is subject to change

What is the advantage of a commercial bridge loan?

Commercial bridge loans are short-term or interim financing—terms, therefore, are usually on the shorter side—between a few months and a year.
Collateral is typically used to secure these loans—most often, the real estate you’re purchasing or renovating will serve as collateral on the loan.
Although lenders will consider traditional business loan requirements, the value of your collateral will also play a large role in whether or not you qualify.
Bridge loans are usually fast-to-fund.
Commercial bridge loans can be issued by banks, alternative, online lenders, as well as private lenders, like hard money lenders.