Imagine this situation (which may not be too far off from your reality). You’re opening your dream business, and you suddenly find the perfect commercial space. The location is in the center of town, surrounded by ample walking traffic and excellent restaurants nearby. Plus it’s not too far from your house, which will make the commute easier every day.
You applied for a conventional bank loan ahead of time knowing that you’re actively looking for retail space. Despite attractive interest rates, the traditional bank loan isn’t the most optimal choice because of all the paperwork and the funding process that will ultimately take too long to come through. Since quick decision-making is crucial, the lengthy process and long window of approval could result in missing the chance to secure your perfect commercial space.
When traditional lenders take too long and you need to act fast, smart investors and savvy business owners know that securing alternative capital from a private real estate lender means more expertise, faster turnaround time, and attractive rates.
One of the most popular private real estate loans and the perfect way to finance your property without worrying about the long delays from big banks is through a commercial bridge loan.
You can read more about commercial bridge loans here, but put simply, commercial bridge loans are short-term hard money loans that investors and business owners use to get from point A to point B when time is of the essence. While seeking long-term capital, the commercial bridge loan acts as a gap between applying for traditional funding and receiving that funding from the bank.
If you need funding to get your new business, income-producing property, or real estate investment off the ground in a short amount of time, check out these three insider tips to maximize your commercial bridge loan.
1. Ask About Prepayment Incentives or Penalties
Confident entrepreneurs trust that their business will succeed with the right amount of hard work and skillful investing, thus they will be able to repay their commercial bridge loan quickly. Sometimes an early payment can yield incentives, and on the other hand, sometimes they can yield financial penalties.
Before you finalize your commercial bridge loan, ask about incentives or penalties for prepaying your loan balance. If you happen to line up more “permanent” capital to repay the loan in a shorter amount of time than agreed upon, see the terms and conditions for prepaying your loan amount.
2. Look for a Shorter Turnaround Time
Turnaround times vary depending on the hard money lender you work with. In order to get the funding you need, working with a well-capitalized hard money lender is crucial for reaching maximum returns on your investment. The faster you get your capital, the faster you can start building the business of your dreams.
At Community Capital, we’re proud to offer quick, secure commercial bridge loans from 12-24 months. Because we are a nimble, professional, and experienced team of underwriters, we get you the answers you need within 24 hours – so you always have an important edge in the real estate investment market.
3. Ask About Fees Up Front
To ensure your commercial bridge loan is a fit for you, make sure you understand the fees, funding options, and interest rates before you take on the loan.
To start, make sure that the hard money lender you select isn’t tacking on unnecessary fees. Working with a well-connected, well-capitalized team like Community Capital Holdings is a great way to ensure that there are no hidden fees, unnecessary charges, or unexpected costs.
We offer reliable, transparent lending options to qualified borrowers that fit our criteria. 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.
For more information regarding commercial bridge loans, contact us online or at (954) 947-1232.