Bridge Loan

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Bridge Loan

A bridge loan is defined as a short-term real estate loan that gives the property owner time to complete some task – such as improving the property, finding a new tenant and/or selling the property.

The typical commercial property bridge loan has a term of six months to one year, although many commercial bridge loan lenders will grant the owner the option to extend for six months to one year for a fee of between a half-point point to two points.

Commercial property bridge loans are typically paid off when the owner places permanent financing on the property, after the improvements are completed and the new tenant(s) move into the property. Because of their short term nature, most bridge loans have no prepayment penalty.

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