Commercial Real Estate Bridge Loan
A bridge loan is a type of short-term financing that allows businesses to purchase assets until long-term financing is established. These loans are quick, being processed in as soon as five days, allowing your business to leverage market deals and start projects immediately.
Once a business secures long-term financing, those proceeds are then used to pay off the bridge loan. Bridge loans often come with higher interest rates, which is why this financing option is best used for short-term capital needs, like real estate, equipment, and inventory purchases.
5 Uses for Bridge Loans
Bridge loans can be used for a variety of reasons, but are most seen in commercial real estate purchases. Whatever the specific use, there is generally an underlying asset being purchased and other assets available for collateral. Here are five different ways your business can utilize a bridge loan.
#1: Real Estate Purchase
The purchase of commercial real estate remains one of the top uses for bridge loans. Traditional financing through a financial institution can be a long and complicated process, resulting in losing the opportunity to purchase a property. Going through the process of obtaining permits, conducting inspections, and waiting on appraisals can take a few months. Instead, businesses are turning to a bridge loan to secure the property and obtain long-term financing later. When a real estate market is booming, timely acquisitions are important.
#2: Equipment Purchase
Equipment loans through financial institutions work in a similar manner to real estate loans. The process is time-intensive, leading to missed opportunities to purchase secondhand equipment at a steep discount. Additionally, since it can be hard to determine the exact value of the model you are buying, conventional financing can be difficult. Businesses are seeing success by using a bridge loan that is collateralized by other business real estate assets to finance this new equipment purchase.
Loans are made or arranged by Wilshire Quinn Income Fund, LLC (the “Fund”) pursuant to California Finance Lenders Law license #603J060. The information contained in this message is for informational purposes only and is meant to provide general background information on the Fund and its manager, Wilshire Quinn Capital, Inc. (the “Manager”). Any and all information herein is deemed reliable but is not guaranteed.
#3: Foreclosure Purchase
Foreclosed property often gets sold for low prices, but there’s no guarantee of the state of the property. The unknowns make it difficult to obtain traditional financing before you go to bid at an auction. Even if you have a general understanding of what you are getting into, many lenders are hesitant to lend money for foreclosed property. On the contrary, businesses can use a bridge loan that is secured by other real estate assets to make an offer on a foreclosed property, with the ability to make interest-only payments until you work out long-term financing.
#4: Inventory Purchase
Many businesses rely on a line of credit to make inventory purchases. However, some businesses have trouble securing a line of credit or have already maxed out their borrowing limits. When this situation arises, businesses may have to turn to merchant cash advances, which are expensive. Instead of using an expensive merchant cash advance, businesses can utilize bridge loans to purchase the needed inventory, refinancing with a long-term loan down the road. This can minimize business disruptions from lack of inventory and save your business on costs.
#5: Real Estate Rehab
Just like foreclosed property, businesses have trouble securing a loan for real estate renovations. When your business needs to expand or update the existing location, you may face a loan denial from your financial institution for long-term financing, especially if the property is fully collateralized. The opportunity to add value to your property or expand operations for growth shouldn’t be overlooked because of denial. Instead, you may want to obtain a bridge loan, that can help you fund the initial upfront expenses, and then potentially refinance the property with a conventional lender using the higher value.
Bridge loans are an effective and efficient way to give your business access to funds that financial institutions may have denied. To learn more about how a bridge loan can benefit your business, reach out to Wilshire Quinn Capital at 619-872-6000 to speak with a loan representative about your bridge loan scenario. You may also visit www.wilshirequinn.com to learn more about rates and lending guidelines.
- Funding typically in 5-7 business days
Loan Amounts from $200,000 to $20,000,000
Interest Rates from 7.5% to 11%
Loan Term: 3 – 24 months
Commercial & Residential (non-owner occupied) Real Estate
- Purchase, Refinance, Cash-out Refinance, Rehab, Blanket Loans
Foreign National Loans Available
About Wilshire Quinn
Wilshire Quinn is a San Diego hard money lender focused on short term bridge loans, secured by first trust deeds. The company is based in San Diego, CA with offices in Los Angeles and San Francisco. Wilshire Quinn typically funds loans for their customers in 5-7 days. Their successful track record is closely linked to their ability to make immediate lending decisions based on their highly disciplined underwriting approach. The company funds a variety of loans such as: refinance, purchase, blanket, rehab loans, 1031 exchange, partnership buyouts, and more. They originate hard money loans ranging from $200,000 – $20,000,000. Wilshire Quinn works with commercial and residential buyers nationwide.
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