If you work in construction in Florida, you know that securing the right financing is an essential piece of the puzzle. However, getting funding on the right terms isn’t always easy. Bridge loans offer a valuable tool for construction projects that may make financing the full project easier. With the development boom in Florida, this is especially important.
Bridge Loans and How They Work
Bridge loans are a type of short-term loan that allows the borrower to get money secured by equity in a current asset. Although there are many types of bridge loans, they are most often used when making real estate transactions. In this arrangement, the equity in a current property can be used to raise money to buy another property, typically as the down payment on a larger loan. The bridge loan is then paid off when the original property is sold.
For residential borrowers, this is helpful because it can prevent the need to line up selling a current home and buying a new one. It is also frequently used by commercial borrowers who want to move quickly on opportunities. This can include funding a construction project or buying the land that you want to develop.
Paying for construction projects often relies on construction financing. These are special loans that may be taken against the value of the land or some other asset to help pay for the development of a property either as new construction or a renovation.
The longer you sit on a property without developing it, the more you are spending and the more opportunity for returns you are missing. Therefore, it is often in the interest of a developer to get a construction project financed quickly. However, it is not always possible to make the necessary down payment on a loan, especially if your cash is tied up in other projects and properties.
Using a bridge loan can help to bridge the gap between where your finances are currently and where you need to be. It can help you get money from the equity you own in various properties to help fund your latest project. It could also be used to help with buying the land that you want to develop. This is especially relevant for time-sensitive opportunities.
Florida Development and Bridge Loans
Florida has experienced an increase in demand for high-end housing options as people have tried to escape colder climates and high taxes during the COVID-19 pandemic. This means there are opportunities to be leveraged if you have the right financing. However, the trend may not last forever. You will need to move quickly to take full advantage of it. For this, a bridge loan may help you to secure the money you need to thrive.
Explore More Today
Discover more about financing construction projects and bridge loans today. HML Solutions is an expert in bridge loans and hard money loans. We can help you get the financing you need for all your construction and other business ventures in Florida. Contact us today to learn more about these financing options.