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What is a Commercial Bridge Loan?

Are you looking for ways to capitalize on the real estate industry? Whether you are looking to expand your current fleet of commercial real estate properties or are just entering the real estate market for the first time, you need to have the right lender on your side.

Commercial bridge loans are designed for real estate investors to infuse flexibility and speed into the process. Understanding the basics of commercial bridge loans and the typical process is important to determine if it is the best financing option for your next purchase.

What is a Commercial Bridge Loan?

A commercial bridge loan is a short-term financing solution used to cover immediate capital needs on real estate opportunities. This type of financing is called a ‘bridge’ loan because it provides temporary funding until more permanent financing becomes available, bridging the gap in a borrower’s cash shortages. Common property types that utilize commercial bridge financing include retail centers, hotels, multi-family properties, and office buildings.

With recent market conditions, commercial real estate properties are moving quickly. This makes financing through a traditional financial institution less than ideal for real estate investors. With a traditional lender the process from applying to closing can take several weeks. However, most private lenders are able to close in a few days, allowing you to offer competitive terms on your next investment property purchase.

What is a Commercial Bridge Loan?

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.

What is a Commercial Bridge Loan?

How Do Commercial Bridge Loans Work?

Private lenders have the ability to offer customized loan structures based on your needs. For example, if you decide you want to pay off your loan early, you can do so with no prepayment penalty. Or if you need to borrow over the purchase price to have funds for repairs, private lenders can offer this option.

Once you’ve identified the commercial property you want to purchase, you will reach out to a bridge loan lender. Then you go through the application process, which entails submitting requested documents and a completed loan application. Although the private lender will pull your credit report, the details of the property you are purchasing will be more influential.

For example, what is the loan-to-value ratio on your loan request? The LTV is calculated by dividing your total loan amount by your collateral’s appraised value or purchase price. Loan-to-value is one of the primary factors that bridge loan lenders use to determine your loan amount.

Summary

If you’re investing in commercial real estate, you will most likely need to borrow money at some point in the process. Instead of trying to work out terms with a traditional financial institution, turn to private lenders that can provide bridge loans designed for your unique loan request. Our team at Wilshire Quinn Capital can do just that. Reach out to a team member today to discuss your financing options.

There are ways you can improve the interest rate on your bridge loan. However, bridge loans shouldn’t be relied on as a long-term solution. You might be better off paying a higher interest rate for a few months, then refinancing at a later point.

Nevertheless, if you want to lower the interest rate on your bridge loan, you can consider cross-collateralizing other properties you own, increasing your downpayment, or waiting for market conditions to improve.

Summary

Bridge loans are a great option for real estate investors looking to purchase a new property, even with high interest rates. The flexibility, quick access to funds, and lenient approval process are unmatched compared to traditional financing avenues.

Our team at Wilshire Quinn has the specialized knowledge and expertise, to fund loan requests for unique and complex situations. If a bridge loan seems right for your next real estate investment, reach out to one of our team members at Wilshire Quinn Capital today.

  • 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

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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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By |October 12th, 2023|Categories: Bridge Loan|Tags: |
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