We are sure that many of you may feel that understanding what commercial real estate bridge loans are all about it is somewhat complicated and complex but the thing is, that really is not the case at all. When a person is interested in purchasing a piece of commercial real estate and is in need of time to do other tasks such as property improvement, looking for potential tenants, or even selling the property, what they need is a commercial real estate bridge loan as it has the ability of making all these things possible. View this site for more info about commercial.
One thing about these types of loans that you should be aware of is the fact that they are usually planned around terms of six months to one year. But then again, there are instances when the lender will allow the owner the option to extend the said loan for an additional six months to one year. As for the free for the extension of the loan, it is usually between one point to two points. These types of loans, oftentimes, are thought of as a financing bridge which takes place between the acquisition and the development of a property and the time prior to the enactment of the permanent and traditional take out loan.
Another thing about commercial real estate bridge loans that you should be aware of is the fact that they can be useful in situations in which the borrower wants to buy a commercial building and is already approved for an SBA loan. Yet, the conventional SBA loan is contingent to only a year of successful business. The borrower will get the money that he or she needs for fund the project that he or she has by means of arranging for the seller to carry back thirty percent of the purchase price of the said property. After that, the borrower will then secure a commercial real estate bridge loans for the remainder of the loan. The loan will then allow the borrower to go ahead and buy the property as well as establish a good and solid operating history which qualifies it for a long-term, conventional financing. However, the conventional SBA loan is contingent upon one year of successful business. The borrower gets the money to fund the project by arranging for the seller to carry back thirty percent of the purchase price of a property. The borrower then secures a commercial real estate bridge loan from Assets America for the remaining portion of the loan. The loan enables the borrower to go ahead and purchase the property and establish a good, solid operating history that qualifies it for conventional, long-term financing.
See more info on this link: https://en.wikipedia.org/wiki/Business_loan.