As a referral partner, private lender, or mortgage broker, it is critical to obtain the appropriate financing solutions for your customers. Conventional loan products are effective in most situations, but when there is limited time or conventional funding is not possible, alternative financing solutions such as bridge loans may prove to be a lifesaver.
Bridge loans offer short-term capital that enables real estate investors to act fast on deals, making them an excellent resource for brokers and wholesale lending partners who want to provide flexible solutions to their customers. In this guide, we'll cover everything you need to know about bridge loans—how they work, when to suggest them, and why they can be a useful addition to your lending arsenal.
A bridge loan is a short-term financing solution extended by private or hard-money lenders that will enable investors to purchase properties quickly before securing long-term financing. The loans "bridge" the space between the purchase of a new property and the sale of an old one or the refinancing into a permanent loan.
Generally issued for 6 to 24 months, bridge loans have higher interest rates because they are short-term. They provide flexibility and quickness that conventional loans usually can't, but they are a favored choice in high-speed real estate transactions.
For wholesale lenders and brokers, bridge loans open the door to providing clients access to capital when they need it most, never having to watch a profitable deal slip away from them because approval was too long or lending rules too strict.
As a third-party originator or referral partner, offering bridge loans can set you apart from competitors by expanding your financing solutions. Here’s why bridge loans are valuable for your business:
Understanding when to position a bridge loan to your clients is key. Here are the most common scenarios where bridge loans make sense:
By recognizing these situations, you can position yourself as a trusted advisor who provides tailored financing solutions.
Bridge loans have varying qualification requirements from conventional financing. As a broker or wholesale lending partner, knowing these requirements will enable you to set proper expectations for your clients.
By guiding your clients through these requirements, you can help them prepare strong applications and improve their chances of approval.
As a broker or referral partner, successfully introducing bridge loans to your clients requires the right approach. Here’s how you can make the case:
Real estate investors appreciate swift access to funds. Highlight that bridge loans close in days, not weeks, so they can take advantage of opportunities without delay.
Some clients might be reluctant because of the elevated interest charges. Clarify that the temporary nature of the loan reduces overall interest expense, and having the ability to acquire the property quickly tends to outweigh the expense.
If you’ve helped past clients secure bridge loans for profitable deals, share those experiences. Case studies and real-world examples build trust and demonstrate the effectiveness of this financing option.
Make sure your clients understand their exit plan—whether through refinancing, selling the property, or another method. This helps ensure they use bridge loans effectively and avoid unnecessary risks.
At RCN Capital, we understand the challenges mortgage brokers and wholesale lending partners face when securing financing for real estate investors. That’s why we’ve designed our bridge loan programs to be broker-friendly, offering:
When you partner with RCN Capital, you gain access to a trusted lender that helps you close more deals, grow your business, and provide best-in-class financing solutions to your clients. Connect with us today to discuss our real estate loan solutions and how they can help you grow your business.