John, a real estate investor, wishes to purchase an office building for a million dollars plus spend another million dollars to renovate it. He believes the building will be worth approximately $2.5 million after the renovation. John doesn’t have the $2 million it will take to make this happen right away and he doesn’t want to miss out on this incredible opportunity.

The clear solution is a bridge loan.

Bridge loans, also known as gap financing, swing financing, or hard money loans, tides you over financially during the gap in time between the purchase of a property and arranging its long-term financing. As the name implies, they serve to bridge the financial gap between current and future circumstances. A bridge loan can essentially allow you to buy a property quickly and without a contingency.

Using a bridge loan for speed to purchase a newly available property before the competition can get it is the most common example, but here are other situations:

  • Refinance an expiring balloon loan to position the property for a permanent loan with terms more favorable to the borrower

  • Down payment on the purchase of a new property your business is moving to and perhaps to pay off the remaining mortgage on the old property

  • To finance extensive renovation and then be replaced by long-term financing on the rehabbed property

  • By making timely bridge loan repayments, you might be able to boost your credit score in order to become eligible for long-term financing

The provider of a commercial bridge loan will approve borrowers based on the value of their collateral rather than on their creditworthiness. Therefore, a commercial bridge loan is easier to obtain than a standard mortgage. The proceeds from a commercial bridge loan can be applied to a property you already own, a property you wish to acquire, or both.

Focus Capital Terms for Bridge Financing
Loan Amount $1 million – $100 million
Interest Rates Starting at 5.25%
Loan Terms Up to 36 months
Loan-to-Value Ratio Up to 80%
In general, bridge loans are granted based upon the value of the property that serves as collateral rather than on the credit score of the borrower. Focus Capital has over 50 years of experience in commercial loans, with bridge loans being the most utilized. We deliver lending solutions that are quick, transparent and personalized in determining the best solution to get you the funding you need.