Funding In A Tight Finance Market
Hurry up and wait. This is the current mantra in the commercial construction finance industry. The banking industry is in chaos and getting financing is a slow process. Banks are terrified of risk and so you can wait month after month for funding.
As you probably know, delays in commercial projects can often be deal killers. Cash flow schedules fall apart and things can get ugly very fast. To avoid such problems, the best financing solutions these days seem to be in private money.
The finance market is such a disaster at the moment that no banking source is reliable. When Fannie Mae is going under, you know it is bad. Most developers are now just trying to buy time till things improve. Bridge loans from private money are just the way to do it.
With quick approval times, you will have money in hand within a few days of applying and can get the project moving. At the same time, you can seek out traditional financing for the long term without worrying about approval times. Once you have that loan, you can pay off the bridge loan.
Finance is all about leverage and liquidity. In the current market, there is no liquidity. Getting money is hard. You can leverage your position with a bridge loan, however, and get your project rolling while others fail.
If you think finding money for your project this year is hard, wait till next year. Residential mortgage defaults are expected to double. Banks will be failing right and left. Private money is the way to ride out these rough seas till 2010 when things should settle down.
The cost of a bridge money loan can be high or close to the cost you would expect with a traditional lender. It depends on your particular project. The only way to find out the particulars for your situation is to contact a broker.
There are ways to gain commercial construction loans within a few days time. Contact a private lender for more information via CommercialLoanStop.com. After all, do you really want to keep waiting to get that project started?
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