Are you coming up on an exit? It might be a refinance. It could be a business sale. Whatever the case, there’s a good chance that you need to ensure financial stability during this time. Bridge loans may be the key here. What should you know about bridge loans, and how do you use them?

What Are They?

Bridge loans are exactly what they sound like – loans designed to help you bridge the gap between two points in your business’s lifespan. They are short-term financial tools used to purchase commercial properties while you are searching for a permanent financial solution. For instance, suppose a property needs significant improvements before a commercial lender will offer a conventional loan. A bridge loan gives you the flexibility necessary.

How to Use Them

Bridge loans can be used in many different situations. However, they are generally designed for those looking for investment real estate or business owners seeking space for their companies. The single most common usage of a bridge loan is to purchase and improve a property that needs improvements.

However, there are other uses for these loans. For instance, because they are asset-backed, they may allow buyers with the low credit to purchase commercial properties. They are also well-suited for buyers who need to make a purchase immediately due to a minimal window of opportunity that would disallow the often drawn-out process involved with conventional commercial loans.

What Can Bridge Loans Be Used to Purchase?

You can use these loans to purchase a wide range of property types, from raw land to underdeveloped properties and more. They can also be used to demolish existing structures, to renovate properties, and in flip-like situations.

Are you interested in learning more about these loans? Contact The Capital Rams today.