Post about "Credit"

Commercial Bridge Loans in Today’s Environment

With the current banking crisis and more than a trillion dollars in commercial loans coming due, there is a great opportunity for brokers to increase their income significantly in the commercial real estate finance business. The opportunity for brokers and investors is the best it has been in decades.As balloon mortgages become due many small banks will be taking back much of their own portfolio loans. As a result, brokers will need to help their existing commercial clients obtain commercial bridge loans to pay off their existing commercial loan. Commercial investors will now be able buy commercial properties at a deep discount and use this type of commercial financing for there purchases. This can truly the best of times for brokers and could potentially be the worst of times for existing commercial property owners without the broker’s help.Commercial bridge loans are equity driven and must have an experienced borrower, payment strategy and an exit strategy for repayment of the loan. The bridge loan lender’s primary objective is to meet their borrower’s need for short-term bridge financing with efficiency, flexibility and professionalism.Lending guidelines for these loans will generally include: straight purchases, purchasing REO’s, on-performing notes, and distressed assets or refinancing. Loan sizes will generally range from $2 million to $75 million. All commercial types of properties are usually considered for bridge loans to 75% LTV. Rates vary from 10% to 14% interest only, from 1 to 3 years. The costs for these loans are usually 2 to 3 points and closing time can be expected to be from 10 to 15 business days.