How Does a Business Bridge Loan Work?
Are you short on cash for a real estate purchase? Having difficulty paying for the remodel of an investment property? Scrounging up money from your personal accounts or finding private investors can take time – which isn’t ideal in fast-moving markets.
Another option is a business bridge loan. A business bridge loan closes the gap in cash shortages without compromising your personal accounts or waiting months for long-term funding to be approved.
Understanding how a bridge loan works can help you determine if this short-term financing solution is right for your business.
What is a Business Bridge Loan?
A business bridge loan is a real estate-backed loan where you receive funds secured by equity in your property (or properties). This type of funding is short-term, typically 6-18 months, and used until your company can secure long-term financing. A business bridge loan provides immediate cash flow, allowing you to quickly purchase real estate or begin rehabbing a property.
Due to the flexibility and quick turnaround time of bridge loans, interest rates tend to be higher than conventional loans.
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.
How Does a Business Bridge Loan Work?
The function of your bridge loan might differ based on the lender you work with and your business’s specific needs. However, most business bridge loans are utilized when you are presented with a time sensitive real estate opportunity.
Once you have found a property or determined a need for a quick cash infusion, reach out to a lender to go over the terms of the deal. Most lenders will analyze your business’s appraised property value before determining a loan amount.
The terms of a bridge loan will generally be short-term and can have different payment terms. For example, you might choose to make a balloon payment at the end of the term. By this point, you should have secured more permanent funding that can be used to make the balloon payment.
How Can You Determine If a Bridge Loan is Right for Your Business?
A bridge loan isn’t right for every business, making it important to analyze the advantages and disadvantages based on your situation. A bridge loan might be right for you if any of the following are true:
- You need quick cash.
- You have existing equity tied up in another property.
- You have collateral you can use for the loan.
- You expect to secure long-term financing soon.
- You found a piece of property that you expect to sell quickly.
There are situations where a bridge loan might not be beneficial, including:
- You don’t expect the property to sell quickly.
- You have enough cash on hand.
Determining if a bridge loan is right for you depends on the specifics of your situation. Consulting with a qualified bridge lender, like Willshire Quinn Capital, can help you sort out your funding options. Give us a call at (619) 872-6000 or email info@wilshirequinn.com to set up a consultation with one of our team members.
- 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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