CRE Bridge Loans

Bridge Lending Guide for Commercial Real Estate (CRE) Borrowers

Facing a Looming Balloon Payment or Tight Lender Deadline?

With $957 billion in commercial mortgages maturing in 2025, many property owners are feeling the pressure.

Don't let tight deadlines or expiring loans put your investment at risk. A bridge loan can help you stay in control and navigate these critical moments.

What is a Bridge Loan?

A bridge loan is a short-term, flexible financing solution designed specifically for commercial real estate borrowers who need rapid funding.

Provided by private money lenders, bridge loans differ significantly from traditional bank loans by offering:

Faster approvals: Get the capital you need in days, not weeks or months.

Greater flexibility: Tailored terms to fit your unique situation.

Higher approval rates: Ideal for properties or situations that may not qualify for conventional financing.

They are the perfect solution for urgent needs, whether you're facing a maturing debt obligation or pursuing a time-sensitive acquisition.

Key Features of Bridge Loans

Here's what you can expect from a typical bridge loan through Montgomery Lending:

Loan Amount: From $1 million to $60 million

Term: Typically 1-2 years, providing immediate, short-term relief

Interest Rate: Often a floating rate tied to Prime or SOFR (e.g., Prime + 2%)

Loan-to-Value (LTV): Generally ranges from 50% to 70% of your property's value

Lender Fees:Origination (1%): Covers underwriting and closing costs, deducted at funding (e.g., $100,000 on a $10M loan).

Exit (1%): Paid upon loan repayment, ensuring the lender's return (e.g., $100,000 on a $10M loan).

Total: Typically 2% (1% at funding, 1% at exit).

Broker Fees: 0.5% to 2%, varying based on the complexity of your deal.

Due Diligence Fees: Ranging from $5,000 to $20,000. These upfront, non-refundable fees cover essential items like appraisals, title searches, environmental reports, and legal reviews.

The cost scales with deal size, from $5,000 for smaller loans ($1M–$5M) up to $20,000 for large or complex deals ($20M–$60M).

Asset Classes: We can arrange bridge loans for all commercial real estate types, including multifamily, hotels, assisted living facilities, shelters, industrial properties, and more.

Loan Types: Bridge loans can serve various purposes, including refinance, acquisition, cash-out, construction, mezzanine, and preferred equity solutions.
 
Why Choose a Bridge Loan Over a Bank Loan?

While traditional banks are excellent for long-term, stabilized financing, they often can't match the speed and flexibility required for urgent commercial real estate needs.

Private lenders, specializing in bridge loans, fill this crucial gap:

Speed: Private lenders can approve and fund loans in days, not the weeks or months often seen with banks.

Flexibility: Benefit from customizable terms, such as interest-only payments or non-recourse options, tailored to your specific project.

Higher LTV: Access more capital, with the ability to borrow up to 70% of your property’s value.

Large Deals: Bridge loans are ideal for loans over $50 million, including complex or "hard-to-place" projects that traditional banks might shy away from.

No Red Tape: Fewer regulatory hurdles mean faster access to capital when time is of the essence.
 
Who Provides Bridge Loans?

Bridge loans are sourced from a network of private money lenders who specialize in commercial real estate.

These capital providers often include:

✅Family offices

✅Debt funds

✅Insurance and pension funds

✅Private equity-backed firms

✅REITs (Real Estate Investment Trusts)

As CRE specialists, they often engage directly with borrowers to design customized solutions.

Free from many banking regulations, they offer the agility for quick decisions and flexible terms that traditional lenders cannot.

Benefits for Borrowers

Choosing a bridge loan through Montgomery Lending offers significant advantages:

Fast Funding: Close deals or refinance maturing debt in record time.

Floating Rates: Gain protection from fixed-rate risks in a volatile market.

Minimal Restrictions: Benefit from fewer covenants and less restrictive terms than typical bank loans.

Short-Term Relief: Secure the capital needed to bridge to long-term financing or to stabilize a project before permanent debt.

How Bridge Loans Help

For Current Customers:

More Capital: Fund renovations, facilitate growth, or cover unexpected costs.

Expert Advice: Work with experienced private lenders who offer perspectives beyond your usual advisors.

Non-Bank Options: Access private credit for specific needs while preserving your existing bank relationships for other services.

Debt Relief: Efficiently refinance out of restrictive or maturing bank loans.

For New Customers:

Out-of-State Lenders: Tap into funding sources beyond the limitations of local banks.

Short-Term Solutions: Stabilize projects quickly or bridge the gap until you can secure long-term bank financing.

Bank Pairing: Strategically use banks for treasury services while leveraging private loans for speed and flexibility on specific projects.
 
Common Uses for Bridge Loans

Bridge loans are incredibly versatile and can be used for a variety of critical CRE scenarios:

Maturing Debt: Effectively refinance loans or mortgages due in 2025, including addressing line-of-credit reductions.

Acquisitions: Rapidly fund non-SBA deals, facilitate partner buyouts, or secure mezzanine loans over $5 million.

Investment Properties: Finance non-owner-occupied commercial real estate with speed.

Construction: Support new development projects with high LTV and fast funding capabilities.

Asset-Based Lending: Provide crucial working capital for contractors, manufacturers, or other businesses.
 
Why Act Now?

With $957 billion in CRE loans maturing in 2025 and an environment of rising interest rates, timing is critical.

A bridge loan can be your strategic advantage:

Avoid costly penalties from missed deadlines.

Buy essential time to secure optimal long-term financing.

Keep your investments on track and performing.
 
Need fast, flexible CRE funding?

Contact Montgomery Lending today to discuss your project or refinancing needs.

We'll work to get you a custom term sheet in days and connect you with private lenders who truly understand commercial real estate.

Let's secure your funding and keep your investments moving forward!

What We Need for a Quote:

To provide you with an accurate and timely quote, please be prepared to provide the following information:

Property Type: (e.g., Office Building)
Location: (e.g., 123 Main St, Anytown, USA 12345)
Property Value: (e.g., $1,000,000)
Borrower's Credit Score: (e.g., 720)
Borrower's Income: (e.g., $150,000)
Borrower's Assets: (e.g., $500,000)
Loan Purpose: (e.g., Refinance)

Optional Add-Ons (if applicable):

Property Size: (e.g., 10,000 sq ft)
Occupancy Rate: (e.g., 85%)
Borrower's Debt-to-Income Ratio: (e.g., 30%)
Borrower's Experience: (e.g., 5 years)
Additional Details: (e.g., New roof installed last year)
 
What We'll Eventually Need to Close:

✅Executive Summary
✅Picture of Asset
✅Sourced Uses
✅Historical/Future Financials
✅Borrower Real Estate Owned (REO)
✅Borrower Personal Financial Statement (PFS)
✅Closing Date