What are commercial bridge loans?
At Clopton Capital, we strive to educate potential borrowers as much as possible about the types of loans, terms and factors to consider before we begin a partnership. With this in mind, we never want to assume that any visitor to our site has a built-in understanding of concepts like commercial bridge loans. You might wonder—what are commercial bridge loans? How do commercial bridge loans work? And even more specifically, how do bridge loans work in commercial real estate?
That’s why we’ve created this handy page to keep you informed so that you can move to the next stage of your lending journey with confidence.
But first—what are commercial bridge loans?
A commercial bridge loan is a loan designed to bridge the gap between your current situation and lending that’s on its way. Because commercial lending can involve a long, in-depth application and approval process, businesses sometimes need a quick, short-term loan so that they can get going on a project or remain funded until their loan arrives. That’s where commercial bridge loans come into play. They’re often used in real estate and other commercial situations when fast, short-term funding is necessary.
How do commercial bridge loans work?
Commercial bridge loans are based on the full value of your property as it stands. They’re designed to close quickly in order to close funding gaps. Generally, businesses use them when they’re confident in a future funding source that just hasn’t quite arrived yet, whether due to a long approval process or the need to improve a property’s current situation before applying.
These loans are often short-term. Once long-term funding is acquired, that new loan is used to pay off the bridge loan.
How do bridge loans work in commercial real estate?
In commercial real estate, bridge loans are extremely common. They can be used for a wide range of applications, including properties that haven’t been fully occupied yet, situations where a borrower wants to improve their credit situation before obtaining a long-term loan, or general situations where permanent financing hasn’t arrived but the borrower can’t wait for a project to begin.
The diverse nature of applications that a commercial bridge loan can serve is what makes them such a powerful tool in commercial real estate. Rather than a real estate property or business office sitting unused or not maximizing it’s potential, a commercial real estate bridge loan can give you the funding you need now to move forward.
Let Clopton Capital Handle Your Commercial Bridge Loans
If you’ve found yourself asking: What are commercial bridge loans? You’ve come to the right place. Clopton Capital is one of the most trusted names in commercial bridge loans, and we can’t wait to speak with you about your unique needs and how we can help secure the funding you need now to achieve your business goals.