Commercial Bridge Loans: Fast, Flexible Financing for Multifamily Investors
With constantly changing market conditions, investors sometimes need access to capital with flexible terms to improve or secure an asset. Commercial bridge loans are a popular financing tool that provides borrowers with short-term capital for renovations and purchases. They are often the perfect first step in the door to the beginning of a long-term financial partnership.
What Are Commercial Bridge Loans?
Bridge loans bridge the gap between purchasing or renovating a property and securing permanent, long-term financing. These short-term loans generally have maturities of one to three years and interest-only payments.
Funds from commercial bridge loans give investors time to execute their business plan, including property improvements, lease-up, and ultimately, stabilization. Bridge loan amounts usually range from 65% to 75% loan-to-value (LTV) based on the stabilized value of the property.
Five Advantages of Bridge Loan Financing
- Speed: Bridge loans can close within weeks, enabling investors to act quickly when a promising project arises.
- Loan term flexibility: Terms can be structured around a borrower’s unique situation and proposed business plan.
- Ability to draw funds as needed: Bridge loans are fully capitalized at closing allowing Investors to raise the required equity at closing and have the funds to carry the property through the business plan.
- Market timing: Commercial bridge loans allow investors to capitalize on rapidly changing market dynamics and changes in individual market and sub-market profiles.
- No prepayment penalties: Borrowers can pay off bridge loans without restrictions when ready for permanent financing.
What Types of Commercial Bridge Loans Are Available?
Arbor’s bridge loan program offers investors customizable short-term financing up to $100 million on strong multifamily assets with flexible terms from one to three years, and clear paths to long-term financing. Our full-service product provides white-glove support from our experienced originators, underwriters, and servicing team throughout the bridge process.
Arbor Has Decades of Bridge Financing Experience
With more than 30 years of experience in multifamily, Arbor understands the opportunities and obstacles investors face across changing markets. We have expanded our commercial bridge loans product to meet sector demand, and our long track record through various market cycles demonstrates Arbor’s strength in structuring nimble solutions tailored to investors’ needs.
Contact Arbor to learn how our team can connect you with the customized bridge financing you need to capitalize on a time-sensitive opportunity or unlock added value in an existing asset.
Interested in the multifamily real estate investment market? Contact Arbor today to learn about our array of multifamily and single-family rental financing options and view our other market research and multifamily posts in our research section.