The commercial bridge loans are a lot of things. For instance, these particular kind loans may be just what you need for your future endeavor, they can be the capital you were hoping for and they can help you realize your investment goals in record time. But, for all the good that comes with commercial short-term financing, there are still a few minor disadvantages and one major disadvantage to this particular kind of commercial financing.

In fact, the story always starts out the same. So often you will see a bright, business savvy person with a great investment plan get a commercial bridge loan without weighing the pros and the cons. Consequently, their great investment can easily blow up in their face because they did not truly take the time to consider one of the biggest disadvantages—larger or rather costly regular payments. Sure, this business savvy individual more than likely was aware that short-term financing is just that short-term and with all things short-term there tends to be a price. But, like most people, this bright, savvy business person simply did not realize exactly how short-term affects the repayment process.

Additionally, most commercial bridge loan lenders are simply not flexible with it comes to delayed or delinquent payments. This means before you know it you could be struggling to pay late payments, penalties, and even larger loan fees. You may even think well making sure you have permanent financing lined up will ensure that you won’t end up owning an absorbent amount of money on regular basis. Well, of course, long-term financing that is readily available will help solve this problem, but long-term financing that isn’t quite yet available means you still incur interest (high interest) on your commercial bridge loan in the meantime.

So at this point you are probably wondering—well if bridge loans have the ability to turn into a financial nightmare, why are they still so popular in the investment property industry? Well, as previously mentioned, when handled right, bridge loans can ultimately help get the job done. Moreover, most lenders allow their borrowers to choose from several repayment options. Thus, if you take the time thoroughly think through your current and future financial situation, your plans for your commercial property as well as just how you plan to pay your loan back in full then a bridge loan isn’t a nightmare waiting to happen.

Ultimately, as previously mentioned, short-term financing may be just what you need to get your next business venture going. But, it is always in your best interest to look at a commercial bridge loan or any other kind of short-term financing from every possible angle to ensure that you are not putting yourself in a worse position than you started out in.

Dennis Dahlberg Broker/RI/CEO/MLO

Level 4 Funding LLC
Arizona Tel:  (623) 582-4444 
Texas Tel:      (512) 516-1177 
Dennis@level4funding.com
www.Level4Funding.com

111 Congress Ave |Austin | Texas | 78701