Bridge loans can be used to help close a deal quickly in the world of commercial real estate. They are also very useful when dealing with property or real estate in foreclosure or short sale circumstances. When quick closes are necessary to take advantage of short-term windows of opportunity, a bridge loan can often be the best solution.
Bridge loans are commonly put in place when waiting for more permanent financing threatens to keep a deal from happening. Different projects have unique cash needs and carry their own risk levels. Bridge loans can be quickly put together with minimal documentation to help take advantage of these unique opportunities.
Bridge loans can be useful in a number of situations, and well worth the financing cost. When building permits or land entitlements are sought, developers can obtain bridge loans to carry the project while the approval process moves through the system. When an investor wants to purchase a property with the proceeds from selling another property, but the closings do not overlap, a bridge loan can fill the gap. Properties sold at a discount in exchange for fast closing are excellent candidates for short-term bridge loan financing.