How Bridge Lenders are Different from One Another
Sep 12, 2016
Getting a bridge loan can be a life saver for some property owners that are facing challenging times. If you are one of these property owners, the dilemma you now face is choosing which Bridge Lender you should go with to give you the breathing room you need. Although their purpose may be similar, a borrower searching for alternative property financing should know that every Bridge Loan lender is not the same. Knowing their differences and which lender to work with can save a lot of time, money, and aggravation.
What is a Bridge Loan Lender?By definition, Bridge Loan lenders are private investors or companies who are looking to provide alternative financing to borrowers who do not fit within the time frame and/or lending standards of conventional lenders.
How to Identify the Key Difference between Bridge LendersThe differences between each bridge lender can be derived from the fact that they are private money sources with their own lending criteria and risk thresholds. The rules and regulations that conventional lenders are required to adhere to are not wholly applicable to bridge lenders.
For example, one particular bridge lender may prefer to primarily provide financing to borrowers who are providing car washes or gas stations as security. This type of bridge lender may have a strong knowledge about those subtypes of commercial property. They know how to evaluate those property financials and more importantly, they are able to accurately determine those property values. Because of this, they can streamline the loan process to create a “fast closing” environment, while still minimizing their lending risk exposure. On a worst case scenario, where the borrower defaults on their loan, they would also know how to own, operate or dispose of those particular types of commercial properties. In the end, this bridge lender can feel fairly certain that the money they lend out can find its way back to them.
In that scenario, that lender may earn a reputation in the commercial real estate market for being able to close a bridge loan quickly for car washes and gas stations. But what if the borrower owns an apartment or office building property? Would this borrower receive the same customer service and lending terms from that lender? Probably not, because that is not their specialty. Hard money lenders are not one size fits all – nor should they be. By having lenders with different lending specializations, borrowers looking for alternative financing are better able to get the loan and service they are looking for.
“Hard Money Lenders are not one size fits all – nor should they be.”
A borrower who is looking to use their real property as security to obtain a bridge loan needs to do some background research on the lender’s ability to provide financing for their type of property and more importantly the lender’s ability to actually fund loans. Sadly, some bridge lenders are more akin to being a broker versus an actual lender. They are authorized to represent one or some private money sources but they don’t have control over the actual funds. They still need to go to the money source and see if they are interested in lending at that time and for that type of loan.
Regardless of the merits of the loan, the end source may not be in the mood to lend or they may not have the funds available anymore. The end result is a lot of time wasted by the borrower. In emergency circumstances, this is time, which the borrower did not have to spare in the first place.
Are Hard Money Loans a Good Idea?
In comparison, Riverdale Funding specializes in providing short-term "asset-based" commercial bridge loans to borrowers and mortgage brokers looking to get financing for a wide variety of commercial real estate property types. As an "asset-based lender", Riverdale Funding is primarily concerned with the value of the subject commercial property to be used as security in their loan assessment. Riverdale Funding is not concerned with a borrower’s credit history or their personal financials. This is a huge benefit for borrowers with a less-than-perfect financial history. Moreover, all loans are underwritten and funded in-house. No loans are ever brokered and a borrower can rest assured that funds are readily available to lend. This enables Riverdale Funding to make swift lending decisions and offer flexible lending solutions.
Riverdale’s asset-based lending programs are a perfect alternative for those borrowers who do not qualify for conventional loans or don’t have time to go through the long application process. If you are looking for fast money to take advantage of a ‘must have’ property offering, a commercial property owner looking to avoid a foreclosure, or simply want to pull out existing equity quickly and without the hassle of a long application process – Riverdale Funding can help you get the financing you need.
Riverdale Funding – where hard money lending is made easy.