Bridge Loan Financing in High Demand for Investors
Real estate investors and business owners have been aggressively seeking out bridge loan financing in recent months. Banks still remain quite conservative in their approach to lending on investment properties. This coupled with the large number of discounted properties having become available, has made bridge loan financing more popular than ever.
But what is a bridge loan? A bridge loan is otherwise known as a commercial bridge loan. Commercial bridge loans serve as alternative to bank loans on investment properties. Because bridge loan financing is easier and faster to obtain than a bank loan, it has grown in popularity among investors seeking to make new acquisitions in recent years.
Business owners have also used bridge loan financing to obtain funds for their businesses. Because start-ups and others are in need of funding for their operations, private money loans have allowed them to continue their operations until they can qualify for SBA loans. Both business owners and real estate investors have increased the demand for bridge loans.
Because all U.S. banks, both large and small, will be forced to comply with new banking standards by 2015, many of them will slow down lending even more. This will certainly increase the need for bridge loan financing. Because interest rates are higher for bridge loans than with bank loans, investors have to accept higher interest rates. But with the higher interest rates of bridge loans also comes a convenient speed that you won’t find at a bank. Bridge loan financing can be completed much more rapidly compared with time to complete a bank loan.
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