More than one private lender advertises its bridge loans as being both timely and customizable. Neither promise is something you hear much in relation to traditional commercial and consumer loans. If you have ever applied for a mortgage, you know timeliness and customization are unheard of in that market.
Both are extremely important to the types of clients who normally apply for bridge loans. These are customers with very specific needs that traditional financing can rarely meet. That is one of the reasons they turn to private lenders and their bridge loans.
Actium Partners is a Salt Lake City hard money firm that also offers bridge loans under certain circumstances. They say that in nearly every case, timeliness and customization are imperative to winning the customer.
Timely Approval and Funding
By their very nature, bridge loans are intended for very immediate needs. Let us stick with Actium Partners and their Utah loans. Actium might be approached by a real estate investor who had already arranged traditional bank financing to acquire a block of apartment buildings. But two days before closing, the bank changes its mind and backs out.
The investor now risks not being able to close the deal on time. By extension, this risks the deal altogether inasmuch as there are competitors waiting to snatch up the property if they can.
A Timely Loan for Closing
Actium has the ability to jump on the issue right away. All they need for approval is an adequate appraisal of the property. Assuming an appraisal can be done the same day they are contacted, a bridge loan can be arranged and funded within 24 to 48 hours. The investor saves the deal and is afforded six months to arrange a new bank loan.
Bridge Loan Customization
Bridge loans used to be made by banks more frequently prior to the 2008 financial crisis. These days, banks tend to shy away from bridge financing when they can. Changes in the law since 2008 limit their flexibility which, in turn, limits their ability to write attractive bridge loans.
Bank inflexibility is often what drives customers to private lenders like Actium Partners. Private lenders who specialize in hard money and bridge loans have the ability to write their loans to each customer’s unique needs. They can be flexible with everything from rates and terms to points and fees.
Each Situation Is Different
Flexibility is particularly important to borrowers for the simple fact that every situation is different. Understand that most bridge loans go toward financing real estate transactions. But obtaining commercial properties is nothing like buying a home as your primary residence.
Residential mortgages are fairly straightforward. That’s to be expected because the transactions are straightforward as well. Not so with commercial transactions. Commercial acquisitions are far more complex, involving all sorts of factors that do not apply to residential purposes. As such, investors really need access to more flexible financing to get their deals done.
Banks Just Can’t Compete
Banks provide valuable services to consumers and businesses alike. They offer funding to buy homes, purchase cars, and meet a range of personal and business needs. Yet they cannot compete in the bridge loan arena. They cannot do what private lenders can do.
To the regular bridge loan user, choosing private bridge funding over traditional bank financing is a no-brainer. Bridge loans offer timeliness and customization with virtually every deal. It is exactly what real estate investors need to remain competitive in the market. Without timeliness and the ability to customize, it’s too hard for investors to compete for the best properties on the market.
