Bridge loans and real estate go together like baseball and hot dogs. They are a popular financing option among investors and businesses needing quick access to capital on a short-term basis. A bridge loan from a firm like Actium Partners opens the door to opportunities that are just not available through traditional funding.
A bridge loan is a short-term loan with a term of 6-24 months. The shorter, the better for both borrower and lender. Take a 6-month bridge loan. You can get in and out quickly with a loan that can be arranged in a matter of days and with very little hassle.
Contact Actium Partners to learn more about our bridge loans in Utah, Idaho, and Colorado. In the meantime, here are some typical uses for short-term bridge loans:
1. Property Acquisition
Real estate investors and businesses often turn to bridge loans to finance the acquisition of income-generating properties. Examples include:
- Office buildings
- Retail shopping centers
- Medical buildings
- Multi-family units or complexes
A bridge loan is a fantastic option for a borrower looking to arrange long-term financing but who needs to close the deal quickly. A bridge loan can fund the acquisition. A more traditional loan, arranged at a later date, provides financing to repay the bridge loan.
2. Business Expansion and Relocation
Businesses sometimes need to obtain property to either expand or relocate. Bridge loans can provide the necessary funds in short order. A new property can be acquired, the business can relocate or expand, and then other properties can be sold or rented to provide the funds to repay the bridge loan.
Bridge loans are especially valuable to businesses attempting to relocate. There are a lot of moving parts that come with relocation, so borrowers need flexible lenders capable of working within their circumstances. A hard money lender is the ideal choice.
3. 1031 Property Exchanges
The 1031 property exchange is a tax-deferral program that allows a real estate investor to exchange one property for another of similar value without immediately paying tax on the property being sold. Needless to say, 1031 exchanges are complicated. Investors need to comply with a detailed set of rules to make it all work.
Likewise, they need funding that is flexible enough to work within their circumstances. A good example lies in an investor looking to conduct both a forward and reverse exchange simultaneously. A bridge loan can make it happen.
4. Distressed Property Acquisition
Distressed properties represent excellent opportunities for real estate investors. One thing they are known for is the strict closing deadline. Sellers are looking to get distressed properties off the books as quickly as possible. They tend to be impatient with potential buyers waiting for financing.
Because bridge loans can be arranged quickly, they are ideal for obtaining distressed properties at extremely attractive prices. A fast underwriting process that can get a borrower to closing quickly equals leverage when negotiating sale price.
5. Debt Refinancing
Although most of our bridge loans are dedicated to property acquisitions, we occasionally run across a business borrower looking to refinancing existing loans on the verge of maturity. A bridge loan provides a temporary funding solution until more permanent financing can be arranged.
A 6-month bridge loan could be just what you need to reach your financial goals. Perhaps you need a loan with a longer term. Regardless, Actium Partners specializes in hard money and bridge loans in Utah, Colorado, and Idaho. Let us help you make the financial ends meet so that you can complete whatever it is you are currently working on.
