Skip to main content

Lend America partners with the Rainy Day Foundation to support Homeowner Education and Loan Protection Program

Apr 30, 2008

Bridge capital is alive and wellDarin YoungBridge capital, bridge loans, Hawkins Capital It is an unusual day in today's market for my company to not get a call from a developer looking for capital where a traditional lender has stopped funding a project. Amidst the credit crunch funding for many projects has simply ceased all together. So what are the advantages of bridge capital? Speed of execution Bridge transactions can be closed in as little as five business days without the need for an appraisal prior to funding. Term to one-year Bridge transactions can be structured from one to 12 months, with extensions possible allowing a project to be completed, rehabbed, leased, sold and/or stabilized for permanent financing without prepayment penalties. Creative structure In many cases, existing projects may not have sufficient equity. Bridge transactions can often be structured using cross collateral allowing a project to be completed without additional capital investment by the developer/investor. Cash out Amidst the "credit crunch" many developers/investors have lost liquidity. Cash out transactions can be structured on existing income producing commercial property providing instant liquidity to the developer/investor. Distressed asset workouts Since bridge transactions are asset based, credit and income are secondary. If sufficient equity exists in real estate assets a workout transaction can usually be structured to save a distressed asset. Costs While interest rates and points are higher than traditional financing, bridge capital is significantly less expensive than equity. Overall, bridge capital can be a valuable tool for a developer/investor enabling an asset to be completed, rehabbed, leased, sold or stabilized. Darin Young is a business development officer for Hawkins Capital, a direct lender based in Salt Lake City, Utah. He may be reached at (801) 936-5100 or e-mail [email protected].
About the author
Published
Apr 30, 2008
Mortgage Insurance Premium Tax Write-Off Back On The Table

Bipartisan bill would restore, expand expired MIP deduction, aiming to ease homeownership costs for millions

Apr 15, 2025
FBI Boston Warns Of Growing Title Fraud

Fraudsters forging documents to sell properties or take out mortgages on them, FBI says

Apr 14, 2025
Remembering Kevin DeLory

Equity Prime Mortgage executive, 53, passes away after battle with cancer

Apr 10, 2025
UWM Taps Google To Double Loan Output

The strategic partnership brings AI-driven automation and cloud technology to streamline the home loan process for brokers and borrowers

Apr 08, 2025
Only First-Time Buyers Should Get Mortgage Interest Deduction, UI Says

Urban Institute proposes changing the tax code, but will policymakers and trade groups go for it?

Apr 04, 2025
The Big Red Mortgage Revolution

How Redfin’s sale to Rocket is upending the lending world – again.

Apr 03, 2025