Is your project a good candidate for bridge financing? How does bridge financing work?
• Bridge financing creates a bridge between a venture that requires funds and the necessary financing.
• Bridge financing is short-term.
• Bridge financing can lead to a quick closing, which then can give you the time you need to find a permanent financing solution.
Some examples of our clients who are good candidates for bridge loans:
Client #1 had discovered an underperforming hotel property with an off-site owner who very much wanted to sell due to changing family circumstances. Our client wanted to take advantage of Small Business Association products, but the seller wanted to close more quickly than a typical SBA loan schedule would permit. In order to satisfy the seller’s demands, GRP arranged for bridge financing, so that the property could be purchased without delay. Within an approved time frame, the buyer then was able to close at a later date with an SBA product, utilizing a lender that GRP had matched them with.
Client #2 is considering a HUD (Housing and Urban Development) loan to finance a project. At the cost of a long funding process, HUD loans can offer a maximum amortization period for a low long-term fixed rate. Taking on short-term debt initially may allow the client to take control of the project in a much shorter time frame.
Client #3, a repeat customer of ours, was quite experienced in the hospitality business and was ready to jump into a new venture. Our lender partners, some of whom are somewhat risk-averse, were not ready to jump into financing this project. By securing bridge financing, our client acquired and renovated the property and successfully launched the new business. After a year of healthy financial statements to show for his efforts, GRP Capital was able to find a permanent financing partner at a competitive rate.
Springhouse Living – Cartersville, GA
Bridge lending saved the day with this promising investment opportunity. Our clients realized the potential for this property, a former hotel, which had the infrastructure to be utilized for greater profit as an assisted living facility, with independent living options and memory care. Located perfectly in an underserved market, the project had all of the markings to turn over a profit. Competitive senior housing options were far away; this facility clearly met the senior housing needs of the local community.
GRP Capital believed in our clients’ ability to oversee the conversion and to achieve the necessary cash flow to pay back their loans. The deal needed to close quickly, and the previous noteholder was not willing to underwrite the loan. This was a perfect use of the GRP Capital Debt Fund, sourcing financing when traditional lenders were reluctant to do so. Short term affordable bridge financing allowed for the renovation, as well as the hiring of the management and marketing teams. Occupancy is very healthy, and move-in plans are underway.
Whether you are expanding your existing portfolio or investing in your first business, GRP Capital has the resources to help you meet your required capital needs. Our services include divisions of Real Estate Capital Markets, Small Business Financing, Construction Lending, GRP Capital Debt Fund, and Consulting and Advisory. Learn more at grpcapital.com.