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Hard Money Bridge Loans / Real Estate Secured Loans
For Commercial Property / Terms Up to Three Years



Hard Money Bridge Loans

For Commercial Property  / Loans From $1,000,000 to $100,000,000 / Maximum Loan To Value 50% for Land and 65% for Other Kinds of Property / Flexible Terms Up to Three Years / Average Closing Time Is Two Weeks After Approval of Paperwork 

A bridge loan is used for financing a commercial property for a short period of time, up to three years, between the initial requirement for funds and a future permanent financial solution.  Bridge loans collateralized by real estate are also known as hard money loans.  Hard money refers to money that is lent based more on the hard value, or quick sale value of real estate, than on the borrower's financial statement.

Hard money bridge loans can be used by a real estate developer to take advantage of opportunities to purchase or refinance commercial properties that don't meet bank standards.  If a borrower doesn't have time to wait on the slow process of working with a bank, the flexibility and speed of a hard money bridge loan can offer a fast solution to his financing problems.  A hard money bridge loan can often be funded in just two weeks after a completed loan package has been submitted and approved.

Hard money bridge loans are available for commercial projects only.  The maximum loan to value allowed is 50% on land, and 65% on other kinds of property.  In addition, when applying for a hard money loan, a borrower is required to have a minimum of 20% cash or equity invested in a project.

Land projects can not be collateralized with other land, but can be collateralized with other kinds of commercial property.

Business Buyout/Purchases

Hard money funding can be used as leverage to purchase an existing company.  Documentation is required to show all costs, plus profits, expected income, etc. that will be used to repay the loan.  

Construction Pay Off Loans

If a developer has a construction project that is at least 80% completed, he might be able to qualify for a hard money bridge loan to pay off the construction lender and complete the project.  A hard money loan can be used to bridge the gap between a completed project, and standard funding from banks or other traditional lenders.  A developer can use a finished project, or a portion of a finished project, as collateral to raise capital for another project.

Refinancing Commercial Property

Using equity, from real estate already owned as collateral for a new hard money bridge loan, can be a quick way of generating additional working capital to refinance a commercial property.  After all paper work has been submitted, a new hard money loan can be funded in just two weeks.

Preventing Foreclosures

A hard money bridge loan can be used to prevent forclosure on a commercial property.  This kind of hard money loan can work for a property the developer already holds in inventory, or for a new property that is about to be purchased.  A pending foreclosure can be stopped if a property can be collateralized for 50-65% of its loan to value, and if the developer has capital (cash or equity) for the difference between the LTV, and the quick sale value of the property.

Foreign National Mortgage Loans

This kind of hard money loan is for foreign investors who want to purchase commercial real estate located in the United States.  Many different kinds of property can be considered for hard money funding, including; commercial, industrial, residential, hospitality, rehabs, etc. 

Property Purchases

Hard money bridge loans can be used to purchase real estate if borrowers do not meet bank standards, or do not have time to wait for traditional lenders to slowly work through the lending process.  Often when purchasing property there are problems that banks don't like--low credit scores, an incomplete construction project, a damaged building, etc.  Hard money funding can be used to quickly work around these financing problems.

Real Estate Investors

A real estate investor can use a hard money bridge loan to solve cash flow problems.  If investment opportunities are available, but the cash to fund acquisitions, rehabs, etc. is not available, the opportunity to make a profit will be missed.  A fast hard money loan can often make the difference between whether or not a project can be financed.  In addition, a hard money loan can provide the capital needed to quickly fund the purchase of a replacement property to complete a 1031 exchange.

Rehab Hard Money Loans

A rehabber can use a hard money loan for short term financing, until a property has been renovated and sold for a profit.  The average closing time for an approved loan is just two weeks, affording the rehabber a very fast turnaround time.

See the Examples of Hard Money Loans page to learn more about hard money funding.

Real estate developers interested in applying for a hard money loan should read the Guide to Applying for a Hard Money Loan, and then complete the Hard Money / Land Acquisition and Development Application.


Questions and Answers About Hard Money Funding

Land Acquisition and Development

Hard Money / Land Acquisition and Development Application

 Resources:  Financial Links /Glossary