Bridge Financing for Builders and Developers
Bridge financing is a short-term loan that provides funds to a builder or developer as you are waiting for the next stage of financing or development phase to commence. These loans tend to carry a higher than usual interest rate as there is more risk involved and amortized over a shorter period. Bridge loans are also used in emergency situations when unplanned shortfall in funds occurs.
Here are some common scenarios where bridge financing is used:
- The developer has a project that is waiting for permit approvals, but needs money in the interim to carry the project.
- The developer or builder has budget overruns due to unforeseen events or inaccurate budgeting. The project needs to have more funds to be completed.
- The developer or builder changes the scope of the project and requires additional funds to complete.
- The timing or scheduling of the progress draw advances from the primary lender is insufficient for the immediate needs and the developer or builder needs funds to cover the short fall. We have access to lenders that specialize in short-term bridge financing. The closer to the end of project, the quicker you are able to access funds as the risk is much lower.
Sometimes it is more cost-effective to pay for bridge financing than it is to delay a project. Call now and talk to one of our loan specialists who can help move your project ahead.
