Why couldn’t the prominent real estate investor get banks to return his calls when he needed money the most? And it can take months to hear the inevitable answer: “no.”
Kevin Wolfer, President and CEO of Kennedy Funding Financial, says he hears this story from clients all the time. “Banks have very strict guidelines on what they can and can’t do when it comes to commercial real estate loans,” Wolfer says. “They’re not doing something bad for your business on purpose, they just have to stay within the lines that are set by regulators and their shareholders.”
On the other hand, private lenders and so-called ‘hard money’ lenders have more flexibility when it comes to helping get projects to fruition where banks won’t lend. Many bridge loan providers offer fast commitments and rapid closings on any size loan. According to Wolfer, “our versatile loan criteria means we close deals that others simply can’t. We have the acumen and flexibility to analyze your special situation and build a loan that meets your goals. We keep the process moving quickly so you’ll have your money in just a few days.”
Wolfer cautions that bridge loans require strict adherence to the commitments. Borrowers have to be prepared and know the costs associated with such short term loans.
For loans from $1 million to $50 million on such property types as multifamily, condo, office, retail, hotel, industrial, mixed-use and land development, bridge loans can be the right call.