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The power of bridge loans in helping brokers and lending partners close more deals should not be overlooked. This key financing tool helps investors solve a variety of complex funding issues in the scenarios where conventional loans fall short. As a lending partner, offering these programs helps you fund a wider range of deals and positions you as a creative financing solution provider.
Are you a broker or correspondent lender that is looking to add bridge loans to your product offerings? Continue reading to see why they are a must have if you want to close more deals.
#1: Speed to Close
One of the biggest benefits of using bridge loans is how quickly they can provide funding for time-sensitive deals. While traditional mortgages can take weeks or even months for approval, a bridge loan can be approved with funds delivered in as little as 10 days. This speed is a huge advantage for investors, especially in competitive markets where deals get snapped up quickly. It can also be beneficial with short-notice opportunities like auctions or foreclosures. Bottom line: speed helps investors beat the competition and win more deals, which means more business for you as a lending partner.
#2: Solving Timing Gaps
Another key advantage bridge loans have over conventional loans is being able to cover gaps in a borrower’s finances. They are commonly used in scenarios where an investor wants to buy another property before selling an existing asset. A bridge loan lets them acquire the new property immediately, while also giving them time to sell and secure more permanent funding. As a lending partner, the benefits of this should be obvious. Bridge loans offer a creative solution to navigate some of the most complex investing roadblocks, and this allows you to position yourself as a financing problem solver.
#3: Funding Value-Add Opportunities
Offering bridge loans also helps you fund an entirely new category of short-term investments. For investors who flip properties, the 15 or 30-year timeline of a mortgage does not make much sense. Instead, they turn to short-term loans like bridge loans, which have the added benefit of providing funds for renovations on top of property acquisitions. The same can be said for multifamily rental operators who are looking to boost their cash flow. Bridge loans give them the financing they need to make upgrades to the property and put them in a better position to secure long-term financing.
#4: Rescue Financing for Deals at Risk
When an investment has stalled due to insufficient financing, it can be difficult to find a lender who is willing to step in and save the deal. Luckily, the private lenders who offer bridge loans have much less stringent criteria for the projects they finance. Loans are asset-based, and underwriting is based on investment return, which means a bridge loan can be a viable solution so long as the deal makes good financial sense. They can be the perfect cash injection a project needs to get across the finish line, and you can also offer them as a backup solution to give investors more peace of mind in riskier transactions.
#5: Expanding Your Client Base
As we’ve mentioned, offering bridge loans lets you fund a wider variety of deals and solve common financing challenges. Adding bridge loans to your product offerings makes you a more versatile lending partner, allowing you to work with more types of investors and handle complex deals others might walk away from. Additionally, offering a range of financing solutions means you can market yourself as a diverse loan provider, and better reach your intended customer base. Once you start offering these programs, you can highlight their benefits in your marketing efforts to attract new clients. To maximize your reach, be sure to take advantage of digital marketing in the form of email outreach and social media and connect with real estate investor groups in your area to offer your services.
RCN Capital
Just as important as the programs you offer is the wholesale lender you choose to partner with. If you want to help your clients maximize the returns on their next investment, choose a lender that can provide you with the best leverages and rates. RCN Capital works with real estate professionals, commercial contractors, developers & small business owners across the nation. We provide short-term fix & flip financing, long-term rental financing, and new construction financing for real estate investors and lending partners. If you are looking to offer bridge financing to your clients, RCN Capital has competitive loan options and an award-winning broker referral program available to partners.