Established 2001
Hard Money / Bridge Loans
A hard money or bridge loan is a type of short-term loan in the finance industry. Hard money loans are taken out for a period of 2 weeks to 3 years in order to finance projects.
Hard money / bridge loans are backed by the value of the property, not the credit worthiness of the borrower. Since the property itself is used as the only protection against default by the borrower, hard money loans have lower loan-to-value (LTV) ratios than traditional loans.
Hard money loans carry higher interest rates and shorter terms than traditional loans. Since traditional lenders, such as banks, do not make hard money loans, hard money lenders are sometimes a pool of private investors or individuals that see value in this type of potentially risky venture.
Hard money loans are used in turnaround situations, short-term financing, and by borrowers with poor credit but substantial equity in their property that wish to stave off bankruptcy.
You would seek a real estate hard money / bridge loan in one of the following scenarios:
- You are trying to convert an apartment complex into condos and a bank will provide you with a sum of money only after a five month period. You take out the bridge loan to finance the project while you are waiting for the bank.
- Your bank just backed out of a loan commitment to you. You are supposed to close next week and the seller already has another buyer in case you can't close. There is not enough time to go to another bank, and you could lose your earnest money. A bridge loan will enable you to close.
- The mortgage on your commercial investment property is maturing with a balloon payment due shortly. You are not prepared to pay it off and risk foreclosure and damage to your credit. A bridge loan will preserve your credit and give you the necessary time to sell or refinance.
- Your credit score has just been hit and no bank is willing to lend to you. You need interim financing. A bridge loan will allow you to complete the transaction, restore your credit and obtain a permanent loan later.
- An opportunity has just arisen. You need to move fast. No bank can provide the capital fast enough. A bridge loan will make the deal happen.
- Loan amount - $1M - $15M
- Interest rates from 9% interest only
- 2 business days for a Loan Commitment
- Closing as fast as 7-14 days (depending on the borrower's responsiveness.)
- Up to 65% LTV (loan-to-value)
- Commercial property acquisitions and refinancing.
- Bank workouts
- Bankruptcies and foreclosures
- Borrower distress
- Tax liens and judgment payoffs
- Partner disputes and restructuring
- No prepayment penalty
- Loans are made for business purposes only
- Real estate equity used for collateral
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