Bridge loans are designed to meet immediate money needs without going to a bank. Private bridge lenders help people’s dreams become a reality through an individually structured loan to meet individual needs.
However, private bridge loans are not a one-size-fits-all kind of loans. Like in most financial services, loans vary between lenders. But in all situations, private bridge lenders provide flexible loan structures, and these loans can be very beneficial to lenders.
Here are some characteristics of private bridge loans.
They are short term
Also known as hard money loans, bridge loans are short-term so they don’t tend to exceed one year. The payment term is often no longer than 6-12 months after which you are expected to pay off the loan, fees, and interest immediately following your house sale. If you are looking to borrow money for less than 6 months, one of Pine Financial Group’s Wisconsin offerings is a 45-day bridge loan designed to remedy short-term financial needs.
The approval process is fast-tracked
Private lenders understand that borrowers in need of bridge loans need the money quickest possible. This means the process to process a loan will be much shorter than in other kinds of loans.
They are differently structured
Private bridge loans may be structured in various ways depending on the lender. The most used structure enables borrowers to settle their mortgages and use the balance for down payments plus closing costs and on a new home.
You can still use a bridge loan as a second mortgage and invest all the money in a new home.
They are backed by collateral
Since private bridge lenders lend money to meet immediate money needs to clients whose cash flow is insufficient, they require some collateral for security. For instance, for a builder seeking to obtain new land, the builder may offer existing land and its assets as collateral.
They are easier to acquire
Private bridge loans are easier to get than traditional banks. Banks put you through a tedious application process, but private bridge lenders get the business done quickly, and their clients can meet their cash needs in no time.
Less risk and more rewards
Bridge loans can be risky but really pay off. What’s more, they mutually benefit both the lender and borrower and cement a long term client-lender relationship.
While there are many ways of acquiring loans, private bridge loans are often the best option. They provide for an immediate financial need which can be very convenient.
