Is the cavalry coming to save the day? For Ft. Worth business owner and developer Ted Allen, when it came to getting a bridge loan to take a $10 million dollar retail renovation project to finish, the answer from banks was “no.” Rather than let the project languish and continue to bleed money, Mr. Allen turned to a retail broker who in turn connected him to the lending experts Kennedy Funding.
The retrofit of an aging ‘strip mall’ retail center was going smoothly. But unexpected costs due to unexpected environmental issues meant the project wasn’t across the finish line. The site was once the home of a gas station that hadn’t been properly remediated. “It’s a shame,” according to Kennedy Funding CEO and President Kevin Wolfer, “but many people who know their business inside and out don’t know about the risks when it comes to borrowing money to expand or renovate.”
Wolfer lays out four things that stop many businesses from closing on short term loans again and again. “First, it’s critical that all titles are in order.” Too many, he says, fail to do their due diligence and provide the paperwork on the important questions of liens and ownership of the property. “All it takes is for one “silent” partner with 1% ownership to speaking up and you can blow up a perfectly good deal.” Wolfer says. Then there’s the matter of getting environmental authorizations. A survey of the property that’s up to date—ideally in the 6 months from the date of the loan is also critical. Lastly, borrowers should work with an attorney experienced in this type of loan to make sure everything is in order.
According to Wolfer, when all that’s in place, there’s no reason why a bridge loan can’t be completed quickly. Even in as little as 10 days.
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