How Commercial Lenders Offering Bridge Loans Provide You A Better Temporary Financing Solution?
Posted: Sep 29, 2016
Bridge loans are a form of commercial loans that are used to meet interim financial requirements. It is a temporary form of financing that is used by investors for a short period until a more permanent type of financing is accessible. It is a loan that helps you bridge the gap between two loans of longer periods. These loans are usually very helpful in situations when you need finances to renovate or purchase commercial real estate. These loans help you cover capital shortfalls that take place when you are stuck in between the repayment of your previous loan and obtaining a new loan. There are a number of benefits that you will entitle yourself to enjoy once you find lenders who can offer you a bridge loan.
You can use bridge loans for a number of different purposes. The most usual form of these loans is mortgage and operating bridge loans. Let's understand this in the light of an example. A company has a mortgage loan on its office, which is due for payment before it can find a replacement long-term loan. In this situation, the company can go for a bridge loan to make the payment for the current loan. Now, as soon as the company finds a more suitable long-term loan, it can easily get rid of the bridge loan from its financial books.
Another benefit of this form of commercial loans is that you can qualify for them more easily than most of the long-term financing options. Lenders, who offer this kind of loans known that they are just offering a gap financing option and that they don't have to be involved in long-term financial relationships. Also, lenders understand that people would be more than willing to pay higher loan generation fee and interest rate because they are in immediate need of finances. Loan lenders in case of bridge loans can also offer customized financing solutions to help meet different needs. A bridge loan is not like a conventional commercial loan as it can be quickly and easily obtained.
There are many bridge loan lenders, who offer you prepayment options without over-burdening you with penalties. This is unlike most traditional loans in which the borrower has to pay a significant fine for the prepayment of a loan. With no prepayment penalty, bridge loans are a more flexible commercial financing option than any other.
However, if you are still not convinced with bridge loans, there are commercial lenders who can offer you a variety of other options, such as direct financing, mezzanine loans, equity funds, private funds, etc.
The author is a blogger. This article is about bridge loans.