COMMERCIAL BRIDGE LOANS

$1 Million Minimum

Commercial Bridge Loan Program 

Real estate investors often encounter frustration when trying to capitalize on immediate opportunities. At Kram Capital, we understand the challenges that real estate investors often encounter when seizing immediate opportunities, particularly in the ever-dynamic realm of real estate. That’s where commercial bridge loans step in as invaluable financial instruments. Unlike traditional commercial loans, these short-term financing solutions are meticulously designed to bridge the gap between your urgent capital requirements and a more long-term financial strategy. Join us on an insightful journey into the world of commercial bridge loans, as we uncover their versatile applications, remarkable benefits, and crucial considerations. Your journey towards success begins now!

Typically, collateral secures bridge loans, primarily the real estate you intend to purchase or renovate. The value of your collateral plays a pivotal role in determining the loan amount you can secure.

Loan-to-Value (LTV) and Loan-to-Cost (LTC) Ratios:

Commercial bridge loan lenders use two key ratios to evaluate your eligibility and assess the risk associated with lending to your business: Loan-to-Value (LTV) and Loan-to-Cost (LTC).

LTV Ratio:

Calculated by dividing the loan amount by the value of your collateral, the LTV ratio is employed when purchasing or refinancing a property. For instance, if your property is valued at $2,000,000 and the lender extends a $1,600,000 loan, your LTV ratio would be 0.8, or 80%.

LTC Ratio:

In cases involving renovation or construction projects, the LTC ratio is applied. It is determined by dividing the loan amount by the total construction cost.

Commercial bridge loan lenders typically offer loan amounts with LTVs or LTCs ranging from 65% to 80%. The remaining percentage is the responsibility of the borrower.

Loan Characteristics:

Due to their direct connection to collateral value, commercial bridge loans may be less reliant on traditional loan requirements when evaluating your application. However, these short-term loans often come with higher interest rates compared to other financing options. Additionally, borrowers may encounter supplementary costs, including processing fees, appraisal fees, and escrow fees, among others, depending on the real estate project.

Common Uses for Commercial Bridge Loans

Commercial bridge loans are a versatile financial tool for businesses and investors, providing solutions for various scenarios, such as:

Seizing Immediate Real Estate Opportunities:

Accessing funds from a bridge loan allows you to purchase a property as soon as it becomes available. Subsequently, you can refinance the bridge loan with a more sustainable, long-term commercial real estate loan.

Temporary Financing:

When you are working on a real estate project but are not yet eligible for long-term financing, a bridge loan can provide essential capital to keep your project on track while you address any impediments to securing long-term financing.

Non-Income Producing Properties:

Bridge loans are suitable for properties not generating immediate income.

Property Flipping:

Investors can utilize bridge loans for purchasing and renovating properties with the intent of selling them for a profit.

Quick Deal Closures:

In situations where you need swift access to funds for a property purchase, bridge loans offer a rapid financing solution while you arrange favorable long-term financing.

Fallback Financing:

When traditional lenders fall through at the last minute, bridge loans can step in as a reliable alternative.

Renovation and Redevelopment:

Bridge loans are ideal for investors planning to renovate or redevelop properties, enhancing their value.

Are you ready to scale your real estate investment business?
Get in touch with us now!

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Atlanta, GA 30326
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