Assetline Capital is recognised as the leader in the short term lending market and has received The Advisor’s “Best Short-Term Lender of the Year” award in 2014, 2015, 2016, 2017. With an entrepreneurial minded team, we are constantly “thinking outside the box” when reviewing all short term loan applications, including bridging loan requirements. We operate Australia-wide.
A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 1 year pending the arrangement of larger or longer-term financing.
A bridge loan is interim financing for an individual or business until permanent financing or the next stage of financing is obtained. Money from the new financing is generally used to “take out” (i.e. to pay back) the bridge loan, as well as other capitalsation needs.
Bridge loans are often used for commercial real estate purchases to quickly close on a property, retrieve real estate from foreclosure, or take advantage of a short-term opportunity in order to secure long-term financing.
Bridge loans on a property are typically paid back when the property is sold, refinanced with a traditional lender, the borrower’s creditworthiness improves, the property is improved or completed, or there is a specific improvement or change that allows a permanent or subsequent round of mortgage financing to occur.
Below are some examples of bridging loans:
A bridge loan is often obtained by developers to carry a project while permit approval is sought. Because there is no guarantee the project will happen, the loan might be at a high interest rate and from a specialised lending source that will accept the risk. Once the project is fully approved, it becomes eligible for loans from more conventional sources that are at lower-interest, for a longer term, and in a greater amount. A construction loan would then be obtained to take out the bridge loan and fund completion of the project.
A bridging loan can be used by a business to ensure continued smooth operation during a time when for example one senior partner wishes to leave whilst another wishes to continue the business. The bridging loan could be made based on the value of the company premises allowing funds to be raised via other sources for example a management buy-in.
A property may be offered at a discount if the purchaser can complete quickly with the discount offsetting the costs of the short term bridging loan used to complete.
Whatever your bridging loan requirements, contact a member of our team who will be able to assess your requirements.