Construction Bridge Loans
“Construction Bridge Loans Can Be The Key To Getting Your
Construction bridge loans are typically required towards the end of a construction project when a shortfall occurs between the amount of funds available for the project and the remaining costs required to complete the project.
A construction bridge loan is not something that is planned in advance, but more of an emergency funding source to keep the project on track.
And when I say emergency, many times a property owner, builder, or developer will call up and require bridge financing for their project in just a matter of days before a contract is broken, or a contractor or sub trade is going to leave the job, or other costs are going to be incurred because money is not available when required.
The need for a bridge loan can steam from many things including a construction draw cut back that was not expected, a delay in advancing a prearranged construction financing draw, a project cost overrun due to unexpected events or a change in scope that intentionally added more work and cost to the project.
Regardless of what the reason is, you’re now in a situation where additional money has to be acquired to complete the rest of the work remaining.
This is where private mortgage lending can become the best option available to you.
There are private mortgage lenders out there that specialize in these short term construction bridge loans where a decision to fund can be made in a matter of hours and funds available for use within two to five business days.
Because a construction bridge loan is typically required at or near the end of a project, there is very little construction risk left, so especially for bridge loans under $50,000 a private lender can comfortably make a decision to fund the bridge financing requirements very quickly in most cases.
While there is going to be a cost for a private bridge loan that may be higher than your primary source of construction financing if that’s from a bank or institutional lender, its likely going to pale in comparison to the costs you will incur if the project is delayed or stalls out completely.
The key to locating and securing construction bridge loans is to work through a private mortgage broker who places these types of deals and works directly with lenders and lawyers that can provide a fast turnaround from the time of financing request to the actual funding.