A commercial bridge loan is typically a capital requirement that is needed right away because some other source of financing or capital did not materialize as planned, creating a hole in the cash flow.
This can be required for an almost infinite number of situations. The common thread is that money is required for a short period of time and its typically needed in a hurry.
The challenge with arranging a commercial bridge loan is getting a lender comfortable with the security being offered.
Many times there can be a considerable amount of assets offered for security, but determining the security value of an asset as well as the liquidation pathway can take too much time to complete.
This is why most commercial bridge loans have real estate security as all or part of the security backing the loan.
With real estate security against a commercial, industrial, or residential property, or an assortment of properties, the value can typically be determined in short order and in the event of default, the bridge lender has a piece of non moveable security in hand to help recoup their investment.
Too often businesses will invest too much time and energy trying to get their equipment or inventory funded through bridge financing sources only to discover that the process typically cannot be covered off in a short period of time. Especially when you have a large number of items in the cash of equipment and/or inventory, it will take some work to get a third party opinion of value acceptable to a bridge lender, and then there are all the logistics around getting a registration on a clear title of equipment as well as where the security will be located and under whose control.
With real estate, everything can pretty much carry on as usual with a new mortgage registered against the property.
The other advantage commercial or industrial real estate can provide to a bridge loan situation is that the private mortgage lender considering the deal may be willing to work with an appraisal and an environmental assessment with some age on them while most bridge lenders looking at securing other assets will likely want an up to date appraisal.
Turn around time for a commercial bridge loan where real estate is provided as security can be as quick as two weeks and can take 3o to 60 days to complete if other types of assets are pledged as security.
If you need a commercial bridge loan for any of a large number of reasons, and you have some real estate to offer as security against the loan, then I suggest that you give me a call so we can quickly go over your requirements together and discuss different commercial bridge loan financing options that may be available to you.