Earlier we discussed how a Hard Money Loan works and under what circumstances someone would request this type of loan. Because Hard Money Loans are similar to Bridge Loans, it seems appropriate to now discuss the latter of the two.
Like a Hard Money Loan, a Bridge Loan is a short term loan that can be very beneficial if you or your company need money right away. Rather than possibly waiting months to finalize a loan through the bank, Bridge Loans can be much easier to obtain. Interest rates are usually anywhere between 12 to 15 percent, with payments lasting up to 12 months.
Bridge Loans are commonly used as intermediate loans to keep a business running while it waits for a more major form of financing. Rather than allowing your company to slow its production while waiting for funds, you could receive a Bridge Loan to continue operating everything smoothly. They “bridge” the short term gap between a company’s funding sources.
Bridge Loans are also commonly used in real estate. When selling a house and buying another, Bridge Loans can be used to cover the costs until the old house is sold. Or, if you already have a good amount of funding for a property you are purchasing, but don’t have quite enough, a Bridge Loan will provide you with the last bit of funding that you need.
Find out if a Bridge Loan is right for you.
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