What is a commercial bridge loan? And is it right for you.

A commercial bridge loan is often confused with a hard money or equity loan. A bring loan is designed to gap the time needed to stabilize a commercial property with long term financing or buy some time needed form the property owner.

Bridge lending like most loans out there can be all over the place as it relates to rates and terms but for the most part are much cheaper than hard money or equity loans. The terms very from 6 months to 36 months with rates usually starting somewhere between long term products that start in the 4%-5% and hard money loans that start in the 10%-12% and higher.

Bridge lending is very common right now especially with the lack of lending form institutional banks. Many of those using this type of financing expect to be able to refinance into more long term fix loans in a few years or have some sort of balloon payment coming due. Hard money or equity lending has it's place and is a great tool if used correctly but should not be considered if the property presents it's self to be a candidate for a better priced better term bridge loan.

For a bridge loan to work the property has to be cashflowing and have a DSCR of at least 1.35-1.5

Credit form the borrower needs to be clean and with at least 3-6 months of reserves. All in all bridge lending is a great option that allows the breathing room needed by so many out there

Roberto Padilla



Nationwide commercial real estate financing

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