Commercial Bridge Loans: A Powerful Tool to Take Advantage of a Great Opportunity
There is a great opportunity to make money right in front of you. You know you can make a big profit on this. The problem is that you have to move fast to get in and you need a loan.
Your regular bank just isn’t equipped to handle this loan application, especially with all the tedious paperwork you’ll have to fill out and the months of waiting to find out if you’ve been approved; that by then it will be too late.
It is not to worry. Apply for a hard money business bridging loan from a private lending company.
A bridge loan, swing loan, or hard money loan can finance up to 60-75% of the property value, and you’ll usually get a response in two days, not two months! A bridge loan is an asset-based loan based solely on the property you plan to purchase or refinance. Your personal credit history has very little to do with a bridge loan, it’s mostly based on the collateral value of the property.
A hard money loan is usually short-term: one to six months, although loans can be made for up to 36 months. Interest rates are typically 12% to 20% and there may be a prepayment fee. There are also points at closing that are added to the loan that range from 1-5%.
Always keep in mind that hard money lenders are smart professionals and want to deal with like-minded people who know exactly what they are doing. So be prepared: There is no such thing as “envelope” prepared when applying for a bridging loan.
Some items to have available when applying for a hard money loan include an executive summary detailing your loan application, photos of the property, rental listings, operating statements, purchase agreements, and most importantly, an investment strategy. clear output of how you plan to repay the loan of hard money.
Hard money lenders will review the information you provide and the more information that is known about your project, the more likely you are to get approved for a bridging loan.
So do your research. Have all your information ready. If necessary, check with an attorney or colleges that have taken out bridging loans. Preparation and presentation is the name of the game.