A Bridge Loan (used in real estate) is a shorter-term loan (typically no longer than two years) that provides temporary funding until a borrower can secure a permanent loan, enabling the borrower to meet current commitments.
Simply put, a bridge loan is a short-term mortgage for real estate investors who prefer to finance the purchase and/or rehabilitation of their investment property rather than buy fully in cash. And because bridge loans are limited in duration, they typically have higher interest rates and require real estate as collateral.
When Would I Use a Bridge Loan?
Bridge loans are options when traditional financing isn’t readily available. An example of this would be getting ready to buy a property with a short time frame to close the transaction. Borrowers can move forward with the buying process while putting down more equity as a down payment. Once the dust settles, they can use what they’ve made to fund a more permanent, long-term loan.
Similarly, property owners looking to acquire a property can use the equity from an existing property that they already own as a down payment for their new property. Business owners may choose to use bridge loans to help cover inventory costs, rent and utilities, or payroll during times of transition.
How do Bridge Loans differ from Regular Loans?
When it comes to a typical loan, lenders require an application process, where they use that information to evaluate your current line of credit, debt, income and more. Depending on the lender/type of loan, a conventional bank loan can take some time.
Bridge loans differ in that they have shorter application, approval and funding timelines. Though Bridge loans may be easier to get, they also typically come with higher interest rates and limited terms. Bridge Loans from Community Capital allow you to use the equity in your current property to make improvements and add value to your investment portfolio.
Community Capital is Florida’s Premier Bridge Loans Lender
Looking for assistance in funding your next real estate property? Community Capital Holdings arranges loans in Florida for the following property types:
- Single-Family Homes & Townhouses (non homestead)
- Condos (non homestead)
- Special-Use Properties
- Medical Office-Condo
With over 120 years of combined experience, we have helped thousands of borrowers reach their real estate investment goals and value the relationships we have built along the way.
Community Capital is nimble – using our connections and experience to get you the answers you need within 24 hours – so you always have an important edge in the investment market.
Please note: All of the loans we fund are for non-owner occupied (rental and investment) properties. Homesteaded primary residences are not eligible.