Bridge Loans & Bridge Loans with Warrants

 

 

 

Bridge Loans &

Bridge Loans

with Warrants

 

What Does Bridge Loan Mean? (Bridging Loan in the UK):
A short-term loan that is used until a company secures permanent financing or removes an existing obligation. This type of financing allows the user to meet current obligations by providing immediate cash flow. The loans are short-term (up to one year) with relatively high interest rates and are backed by some form of collateral such as real estate or inventory.  Also known as interim financing, gap financing or a swing loan.
As the term implies, these loans bridge the gap between times when financing is needed. They are used by corporations and can be customized for many different situations.   For example, let’s say that a company is doing a round of equity financing that is expecting to close in six months. A bridge loan could be used to secure working capital until the round of funding goes through. In the case of real estate, bridge loans are common. As there can often be a time lag between the sale of one property and the purchase of another, a bridge loan allows a commercial real estate investor more flexibility.

What are Warrants?

A security that permits its owner to purchase a specific number of shares of stock at a predetermined price. For example, a warrant may give an investor the right to purchase 5 shares of XYZ common stock at a price of $25 per share until October 1, 20xx. Warrants usually originate as part of a new bond issue, but they trade separately after issuance. Warrants usually have limited lives. Their values are considerably more volatile than the values of the underlying stock. Thus, investment in warrants is not for the timid. Also called equity warrant, stock warrant, subscription warrant.

Bridge / Hard Money Loans

These loans are for customers that need temporary financing until they can acquire permanent funding. These loans in most cases have a very short term and a high interest rate. 

 

Guidelines / Requirements

-          Credit score is not a factor

-          LTV 45% – 65% cases buy cases

-          Exit strategy has to be solid / concrete

-          Will lend on the following

A)      Real estate ( All types )

B)      Land (very select basis)

-          Cash flow is a cases by case scenario

-          Loan amount – $500k & up

Terms

-          1 – 5 years (Based on the project) Balloon note at the end of the term

-          Interest rate – 10% – 15.99%

-          Monthly payments are interest only

-          No pre-payment penalty ( In most cases )

Ovadya Funding Group International, Inc. has nearly 250 lenders in this space.

Keep in mind, Ovadya Funding Group International, Inc. is not a an SEC licensed firm.  We offer this information for your information only.  Legal Disclaimer HERE.  We DIRECTLY represent third-party lenders.  If you are interested in this product, please contact us at: info@ovadyafunding.com. , as Ovadya Funding Group International, Inc. has relationships with a lender(s) involved many project funding types.


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