30 Sep 4 Situations Where Business Owners Use a Bridge Loan
When most people think about bridge loans, they think about using bridge loans to cover some of the upfront fees when selling a home. However, bridge loans can be the perfect funding solution for commercial projects. We discussed the theoretical reasons why a business would consider using a bridge loan. This article will focus on some concrete examples of ways that entrepreneurs and property owners can take advantage of this financial product. Here are four situations when business owners can use a bridge loan from Nelson Funding to finance their projects.
Obtaining Funding to Build a New Retail Centers
It may be hard to remember now, but there was a time in the 80s and 90s when shopping centers were sprouting up left and right. It was a great time to be a developer, a property owner, and a retail store owner. However, the internet has shifted the way many people buy goods, and physical stores have become less relevant. Following the housing crisis and a series of high-profile business closures (e.g., Toys R’ Us), banks are more cautious about property investments. It’s harder to get traditional banks and lenders to take a chance on a new shopping center. A developer can use a bridge loan for building a new shopping center. Once the location is built, and tenants are moved in, it will be easier to secure funding from traditional lenders in the future.
Covering Upgrade Expenses After Losing an Anchor Store
Just as it’s challenging to get funding to build a new shopping center or office park, it’s equally difficult to get fast funding to upgrade an existing property once an anchor tenant leaves. For years, property owners have relied on banks, department stores, and other national retail chains to attract other people to their shopping centers. However, when a bank branch closes, or a large chain store (e.g., Kmart or Sears) moves out, property owners need to make adjustments to their facilities to suit new clients. Without the income from the anchor tenant, property owners can find it challenging to get the funding they need to make necessary upgrades. A bridge loan is an option to make the upgrades that will pay for themselves once they’re completed.
Building Multi-Family Housing Units
As we mentioned before, banks are wary about funding real estate projects, including new multi-family housing units. Just like with retail stores, developers can use a bridge loan to cover much of the cost of building new apartments, townhouses, or subdivisions. Most bridge loans can last up to five years, so it gives the developer plenty of time to develop their projects and fill them with residents. At Nelson Funding, our bridge loans can cover up to 80 percent of the total amount needed, and we can find an appropriate lender within ten days.
Funding for Niche Projects
There are certain industries that banks are reticent to work with due to one reason or another. Bridge loans are ideal funding options for projects that traditional lenders don’t handle. For example, many states have legalized medicinal or recreational marijuana use. However, since it’s still illegal under federal law, many national lenders refuse to finance marijuana dispensaries, grow operations, and similar projects. Nelson Funding can help entrepreneurs in the hemp and cannabis industries get the money they need to get their projects off the ground.
If your business needs to raise money quickly to handle a short-term situation, Nelson Funding can help. We offer a wide range of financial products, including bridge loans. Besides having great rates, we can get a bridge loan for most companies within ten days. You can start the process immediately by filling out a form on our website. If you want to talk about your options first, send us a message online to schedule an appointment where we can discuss your business’s needs.