Short-term financing answers for your commercial real estate needs
A simple, short-term financing option, bridge loans can provide immediate funding to cover commercial real estate property purchases.
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Utilize commercial real estate bridge loans to:
- Act quickly on real estate opportunities.
- Renovate properties.
- Cover temporary funding gaps.
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What are commercial bridge loans and how do they work?
Commercial real estate bridge loans can be used to cover a variety of purchase and renovation costs, ideal for when you need prompt short-term financing. Secured by the property, you can use a bridge loan to help fund real estate purchases that require a quick turnaround before long-term financing can be obtained. You can also use a bridge loan to cover renovations as you prepare to rent or sell a property, or to simply cover your renovation expenses while awaiting expected income levels for leased spaces (stabilization).
What does it mean to stabilize a commercial property?
When you purchase a new property or need to make major updates to an existing one, that real estate may take time to reach its full income-earning potential—whether it’s a multi-unit property that hasn’t reached its expected rate of occupancy, or changes need to be made to prepare it for its next occupant. A property is stabilized when it reaches its expected rate of occupancy and income.
How much can I borrow with a bridge loan?
As with most commercial loan products, bridge loans can’t exceed a designated loan-to-value (LTV) ratio. Generally speaking, while you may be able to borrow the majority of the purchase amount, you will need to attain additional funding for some portion of your purchase. Individual situations vary, so it’s best to consult your UMTB lender with questions about your specific LTV requirements.
What is the typical term of a bridge loan?
Bridge loans are not meant to serve as long-term financing. Terms usually last 2 to 3 years, with payment of the remaining balance due at the end of the term.
What types of properties are eligible for bridge loans?
Bridge loans are available for multi-family, industrial, and retail properties.