Insights | November 7, 2022
What Is a Bridge Loan?
Traditional bank or agency lending tends to be the most widely known option that dominates the financing discussion, but that isn’t the only option available in the marketplace. While traditional capital comes at a cheaper cost, there are more stringent parameters, especially during times of economic uncertainty when market fluctuations impact credit restrictions, regulatory guidelines, bond issuances and other factors. In contrast, short-term financing, or bridge lending, is a tool every owner and operator should have in their financial toolkit.
A bridge loan is short-term or interim financing, that is typically used by a borrower until they secure permanent financing or sell off the underlying real estate. Bridge loans use a collateral-based lending approach, placing the greatest emphasis and weight on the cash flow and collateral value of the real property. In contrast, traditional finance lenders will place the greatest emphasis on credit history and other factors. As the name implies, a bridge loan bridges you from point A to point B, spanning a gap in time or financing, and creating a firmer foundation to receive traditional, lower-cost, longer-term financing once stabilization is realized.
To learn more about Wilshire’s bridge lending program for seniors housing, healthcare, commercial real estate, multifamily, and student housing, review our loan guidelines here.
Wilshire Finance Partners is a real estate finance and investment company specializing in short-term bridge loans and capital solutions for senior living, healthcare, multifamily and commercial real estate, ranging from $1 million to $10 million nationwide.