If you need short-term financing to buy commercial property, you might consider bridge loans. Commercial bridge loans are flexible and more accessible for borrowers that may not qualify for conventional funding. If you are interested in buying a commercial fixer-upper, bridge loans may be the answer.
Here is What You Need to Know:
Commercial Bridge Loans are for Property
You should know that a commercial bridge loan is intended to buy or improve a commercial property. With other financing options available, why would a borrower choose a bridge loan? Here are a few reasons:
The borrower’s credit history is spotty.
The borrower is in a hurry for funding.
The property is unoccupied or condemnable.
There are Qualifications for Bridge Loans
Some of the qualifications that you will need to be eligible for a bridge loan include the following:
-Borrowers should be prepared to demonstrate a decent debt to income ratio to show the ability to pay the loan back.
-Borrowers should have experience in the industry that they are borrowing and investing in.
-Typically, bridge loan amounts do not exceed the borrower’s entire net worth. Do you know your net worth?
-Lenders may require proof that the borrower has enough cash on-hand to deal with fees and unexpected expenditures.
-The higher the credit score, the better.
-Borrowers should plan on providing extensive documentation including but not exclusive to tax forms, a resume, income and rent statements, applicable leases, business plans, bank statements, and a broker’s letter. Depending on who the lender is, more or less documentation may be required.
Need financing right away for a commercial purchase? If you are interested in buying or rehabilitating a commercial property- like a multifamily dwelling- consider a bridge loan. A commercial bridge loan can get you the funding that you need quickly- without the challenges and disappointments of some traditional lenders. Want to learn more? Talk to the industry experts at Capital Funding Source today.