Short term loans, often called bridge loans, are a good source of rapid income to avoid penalties or issues. Learn what a bridge loan can be employed for and how its conditions differ from other kinds of loans.

Bridge loans are usually loans with a short term. A bridge loan's terms range from just a few days to approximately 5 years. Personal loans of some dollars til Saturday notwithstanding, bridge loans are generally useful for commercial real estate purposes to enable a quick locking in, allowing the borrower to take advantage of an opportunity and arrange for longer term financing at his/her discretion.

Real estate bridge loans can be used for both purchases and refinance. Speed is often very important in bridge loans. Either the borrower is faced with an opportunity, such as the opportunity to purchase a property, business or other residence at a great price if s/he moves instantly. Or the borrower is staving off a problem, such as restructuring debt and also avoiding bankruptcy.

Hard money bridge loans are made based upon the current selling price (value) of the real estate to be collateralized. Such bridge loans can close with little documentation/paperwork as little as two weeks. This is not to say that the bridge loan is made without careful attention to the value of the secured property. If you are considering obtaining bridge loans for purchase or refinancing of an existing property, you will require a recent (3 months or less) appraisal, photographs of the property and the area, an indication of how you intend to be able to afford to pay back the loan, how the property will make income, in case applicable, etc. What you won't need is to wait for 4-8 weeks while a bank obtains your credit reports, reviews your previous business actions, residences, etc. Hard money bridge loan lenders are interested in the project as it stands today. Naturally, if you have a history of poor credit, the lender may want to know why this project will be different than others in your previous years. You cannot avoid all scrutiny. But hard money bridge loan lenders tend to have more flexibility in their lending criteria and can be reasonable to operate with.

The trick to getting affordable hard money bridge loans is to work with a direct bridge loan provider. If you have never obtained a bridge loan, you might look into working with a broker. Most lenders who purport to make bridge loans (hard money or otherwise) are in fact brokers. Their services may be valuable and include helping you locate the right direct lender for your project and helping you to prepare the written application documents to your best advantage. However, bridge loan brokers (as with other brokers) are paid in points on your loan. They will collect anywhere from 2-4 points or more. The more brokers involved along the way some brokers will contact other brokers who could contact yet more brokers prior to getting to the direct lender who will fund your bridge loan the more points you will pay. Asking bridge loan specialists whether they will serve as brokers or direct lenders does not always yield an accurate response. You have to be specific and tenacious in order to determine whether the actual party you are speaking with is really prepared to fund your bridge loans in-house and without farming out the loan to another lender. If you are planning to make real estate investment a regular area of your business life, finding a direct bridge loan lender can be worth the effort.

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