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Financing Bridge Loans
The primary purpose for a bridge loan is to allow for the short term development and/or repositioning of an asset. Bridge loans are available for most product categories.
(LTV's) are determined on a case-by-case basis. Terms for the loan vary from 6 months to 2 years with extension options available. These loans are also based on stated income.
RIO Commercial helps developers/investors find short term financing to add value to a property or stabilize the property. Bridge lenders assume the property will be worth a higher value within a one to three year period. By presenting your loan scenario appropriately RIO Commercial will identify the best financing available for your project.
Characteristics of Commercial Real Estate Bridge Loan Terms
| Maximum loan to cost: | 80% to 90% |
| Maximum loan to value: | 70% to 80% of completed value |
| Holdbacks: | In some cases the loan will be made at the future value but a portion will be "held back" until improvements are completed or vacancy is decreased or some other value-add goal is met. |
| Term: | Generally 1 to 3 years with extensions as necessary |
| Amortization: | Interest only |
| Typical Rates: | Prime plus 1.5% to 3.0% or LIBOR plus 3.5% to 4.5% |
| Prepayment terms: | No prepayment penalty |
| Projects: | All commercial property types can be financed. Developer and contractor must have experience at this type and scale of developement. |
| Recourse: | Typically recourse. a few lenders offer non-recourse construction financing for larger loans. |
| Closing costs: | Borrowers are responsible for all due diligence and closings costs (e.g. Appraisal, Phase 1 Environmental, site inspection, title, etc)
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** These are NOT terms of any specific lender and merely a representation of terms most often used in the marketplace. Do not rely on the above as a commitment to provide any specific terms on any specific deal. **
Speak with a RIO Commercial Real Estate Financing Expert
Call 310.593.4738 or E-mail dmoran@riomortgage.net