If you have you found better premises for your business, or perhaps a space with potential to open a new store in, but you do not have enough money to pay for it and the owner is not willing to wait until you sell your property, then you should certainly consider bridge loans for commercial real estate projects.
They can prove to be an easy and economically efficient way of getting the money you need when you need it, until you manage to sell your property or secure a different source of financing. These loans are considered emergency short term solutions: emergency because they are granted much faster than bank mortgage loans, for example, and short term because they are only granted for limited periods of time, ranging from a couple of weeks to several months.
With the approval procedures reduced to basics, these loans use commercial properties as collateral and involve quite high interest rates, meant to cover the risks the lender assumes. This is the main reason why they are recommended as a s
hort term solution only. Here are a few tips on how to make sure bridge loans for commercial real estate projects are what you need and you qualify:
- Gather as much information as possible on the property you intend to buy and the one you intend to sell or use as collateral, especially documents that could attest their value and ownership.
- Draw up a plan to make it clear to the lender how and when you will repay the money you borrow. Don’t forget to study the market first, as you cannot afford to take the loan for two month and not be able to repay it because no one is interested in the property you have on sale.
- Talk to the best reputed lenders in your area and ask them anything you want to know about bridge loans and not only. Make sure you do not sign any agreements until you compare offers and see which one is the safest and most convenient alternative for your needs.
Do not forget that bridge loans for commercial real estate projects can be very costly on long term, so you should make sure you know exactly what you are getting into before taking the money.