Using Bridge Loans for Mergers and Acquisitions in South Florida

The key to successfully negotiating bridge loan financing with HML Solutions or any other lender involves understanding the terms, structure and timing associated with a bridge loan commitment. Bridge loans are commonly used to finance mergers and acquisitions, but it’s important to analyze the economics of the overall transaction before committing to the bridge loan.

Private equity sponsors or corporations trying to win an acquisition bid may need to get a bridge loan as one of the final steps in the process. But bridge loans can be notoriously complex and could culminate in a variety of potential outcomes. For these reasons, the borrower should be very careful about negotiating with the bridge loan lenders to ensure the terms of the loan are ideal for the situation. When it comes to mergers and acquisitions, the bridge loan terms and costs should factor into the borrower’s acquisition projections.

Understanding Bridge Loans

Unlike long-term loans, a bridge loan is not meant to be a permanent source of financing. Though it is possible for a bridge loan to convert to a long-term form of financing if it is not paid at the end of the initial term, this is not an ideal situation for a borrower to experience. When a bridge loan converts to a long-term loan (usually in the form of a term loan with a longer maturity or a bond), it comes with a higher interest rate than the original bridge loan interest rate. Usually, this higher interest rate is a combination of the rate at the end of the loan’s initial term as well as an added premium.

Before the bridge loan converts into a term loan with a longer maturity or a bond, the loan lenders may require the borrower to pay liquidated damages and file a shelf registration. The liquidated damages usually equate to a percentage of the exchange securities principal amount.

Bridge Loan Fee Structure Terms

Here are a few terms associated with bridge loan fees that borrowers should understand before applying for this type of loan. Understanding these terms helps ensure that borrowers fully understand how bridge loan fees are structured and what is expected of borrowers and lenders who enter into a bridge loan agreement.  

  • Duration Fee: This is a fee that’s added onto the bridge loan’s outstanding balance. The longer the bridge loan is outstanding, the higher the fee can potentially be.
  • Refinancing Fee: If a bridge loan is refinanced before its initial term is complete, a refinancing fee applies. This fee is payable at the time of refinancing and is often equal to the conversion or rollover fee.
  • Commitment Fee: A commitment fee is payable when the bridge lender commits to the bridge loan (whether or not the loan is actually funded).
  • Deal-Away Fee: If you decide to use another source of financing at the last minute (on the closing date), a deal-away fee is applied. This fee is payable to the bridge lenders and is designed to compensate them for any fees they would have received if they had funded the bridge loan.
  • Funding Fee: When bridge lenders fund a bridge loan, the borrower pays a funding fee. This fee is payable on the closing date of the bridge loan. Some lenders may refund part of the funding fee if the bridge loan is refinanced prior to reaching maturity. However, this depends on individual bridge lenders and the time that has passed between the loan’s funding and its repayment. Usually, lenders are willing to refund a larger amount if the bridge loan is refinanced shortly after it is funded. For example, lenders may refund up to 75% of the funding fee if the bridge loan is refinanced within 30 days of its initial funding. If the loan is refinanced within 60 days of the original funding date, the lender may refund 50% of the funding fee. If the loan is refinanced within 90 days of the original funding date, the lender may be willing to refund up to 25% of the funding fee. The outside time frames involving funding fee rebates could potentially be as long as 270 days.
  • Bond Underwriting Fee: A bond underwriting fee is applied when the lender underwrites a bond to replace the bridge loan. Usually, the documentation for a bond offering is kept separate from the original bridge loan commitment.
  • Conversion/Rollover Fee: A conversion/rollover fee is designed to compensate the bridge lenders if the bridge loan converts automatically into long-term financing at the end of its initial term due to the borrower not refinancing the loan beforehand. The conversion/rollover fee is usually equal to the underwriting fee that would be paid to the lenders if the bridge loan had been refinanced before the end of the initial term. The conversion/rollover fee may qualify for a rebate, depending on how soon the loan is repaid after it rolls over into a long-term bond.

To avoid potentially paying overlapping fees, it’s important to pay close attention when negotiating fees related to bridge loans. There are some fees that could overlap in cases of inadequate fee negotiation or failure to pay attention to fee terms. Some potential overlaps include the refinancing fee, which could overlap with the deal-away fee. Similarly, the bond underwriting fee could overlap with the refinancing fee in certain situations. Astute borrowers should be aware of this and negotiate during initial bridge loan discussions to cut back on potential instances of fee overlap.

Long-Term Financing Terms

Experienced sponsors who know how to negotiate commitment letters with at least one lender understand how “market flex” works in fee letters. “Market flex” provisions specify that committing lenders can “flex” particular credit facility terms. When underwriters request the ability to vary long-term financing terms to allow for the placement of long-term debt securities or the long-term credit facility’s syndication, the broad discretion requested can be referred to as flex rights. The scope of a sponsor’s flex rights depends on a variety of factors in capital markets, including leverage, sponsor relationship and issuer credit profile.

Terms that may be subject to flex rights include:

  • Price
  • Financial covenants
  • Senior debt
  • Second lien tranches
  • Financial covenant calculations
  • Maturities

Flex rights are important to understand, as they can impact terms significantly in some situations. Flex provisions apply to bridge loan commitments as well as other loan types.

Securities Demand Provisions

One of the most controversial provisions associated with bridge loan negotiation is called the securities demand provision. This provision allows the lender to require the borrower to refinance the loan by issuing long-term debt securities into capital markets. The investment bank controls the long-term financing timing once the securities demand conditions are satisfied. The borrower does not control when the long-term financing is taken to market.

When it comes to negotiating securities demand provisions, a borrower should be aware of the following negotiation points.

  • Sale Process Requirements: This refers to requests from the borrower to the lender to obtain the best securities offering price (or at least make a sincere attempt).
  • Timing: It may be possible for the borrower to limit the ability of the bridge lender to make a securities demand until after funding of the bridge loan. This provides some bridge funding flexibility in the event that the long-term debt price is higher at the time of closing. It can be difficult to obtain “holiday” periods like these from bridge lenders, though.
  • Number and Size of Demands: Borrowers may attempt to limit the minimum size, frequency and number of each demand. If done successfully, this can limit the costs associated with multiple securities demands.

It may not always be possible to negotiate securities demands to match all the desires of the borrower. But it is worth the effort to see if some of the securities demands can be changed to favor the borrower a little more. If lenders are not willing to negotiate terms to a borrower’s satisfaction, it’s important for the borrower to understand that the lender is also taking a risk by making a bridge loan commitment. The terms should ideally be reasonable for both parties involved in the transaction.

In the case of security demand failure, bridge lenders and borrowers must negotiate potential remedies. Typically, lenders will request the ability to utilize the following options if the securities demand fails:

  • Default under the bridge loan for the duration of the failure
  • Increase in the interest rate associated with the bridge loan
  • Conversion/rollover fee payment
  • Modification of the terms associated with the bridge loan (to include defeasance)

Borrowers may also seek to acquire provisions permitting them to refuse any securities demand that could cause adverse tax consequences to the borrower.


A bridge loan can be very helpful for anyone who needs quick cash for mergers and acquisitions. However, before a borrower signs closing documents on such a loan, he or she should make sure the best economic terms have been sought. The more borrowers understand about securities demands, legal terms and flex key economic terms associated with bridge loans, the easier it will be for them to make financial projections and negotiate limits to minimize financial risk.

Using Hard Money for Commercial Real Estate Investments

If you need a quick loan to put a down payment on a property, a hard money loan can be a good option. This type of financing is most often used to fund real estate investments. AS the name implies, hard money loans can sometimes be difficult to obtain, but many lenders, including HML Solutions, have begun offering less-stringent criteria for hard money loan eligibility to make them accessible to more people.

What Is a Hard Money Loan?

A hard money loan is a type of creative financing, which is a financial solution in which an investor provides a borrower with a non-traditional loan. Hard money loans are often harder to qualify for because they typically have high interest rates and strict terms for eligibility.

However, because hard money loans require little to no documentation, the borrower receives money from this financial solution almost instantly. This fact makes hard money loans ideal for real estate buyers who need funding for down payments.

What Are the Benefits of Hard Money Loans?

Hard money loans have two primary benefits. The first advantage of this financial solution is flexibility. Because hard money loans come from private parties or investors, the terms for this avenue of financing are flexible. Loans can easily be tailored to meet the individual needs of the borrower, which allows people with less-than-perfect credit histories to qualify for hard money loans.

The second advantage of hard money loans is speed. Instead of having to wait for financing to be approved, you can receive money from a hard money loan in as little as a week. This speed can make a huge difference in getting the property you want when it becomes available or missing out on it because you can’t afford the down payment.

What Should You Look For in a Hard Money Lender?

When applying for a hard money loan, it’s important to find a lender who meets your needs. Consider the following criteria to decide which lender to work with:

  • Loan Terms: The specific terms of a loan, including the specified payback period, have a direct impact on your profit margin over time.
  • Loan Amount: Various lenders offer different loan amounts, so choose a lender with a debt ceiling higher than the amount of the loan you need.
  • Interest Rates: Hard money loans have higher interest rates than other types of financing, but the rates vary among lenders. Choose to work with one that offers lower interest rates.

How Can You Find a Hard Money Lender?

You can find many resources online that list all of the benefits of various hard money lenders. Some of the websites compare lenders from individual states, while others compare lenders from all across the nation. Reputable websites will include all of the information you need to decide when lender is right for you.

Apply For a Hard Money Loan From HML Solutions Today

A hard money loan is a useful type of financing if you need a quick down payment for a real estate property. HML Solutions offers this financial solution with competitive terms, so if you think a hard money solution is the right type of financing for you, contact us today to apply.

Using a Bridge Loan To Buy Your Next Home in South Florida

When you are buying a home, you have a few different options for financing. The most obvious of these is a conventional mortgage with either a fixed or variable rate. However, there are some circumstances in which this may not be the best choice or even possible. In some cases, using a bridge loan is the better option. Understanding this useful form of financing and its benefits will enable you to make well-informed decisions about buying a home in South Florida.

What Is Bridge Lending?

Bridge financing is essentially a type of loan that helps to close the gap between your current financial situation and your next loan. In other words, it is used to help secure long-term financing. It is used for real estate purchases, renovations and refinancing. Additionally, there needs to be real estate as the collateral on the loan.

Typically, in a real estate purchase, bridge financing is used to cover all or part of the costs of a new property while selling your current property. So, if you are moving primary residence, you could use bridge lending to help with the costs of the new home while you sell your current home.

These loans are typically very short and have high interest rates. However, their total cost is more contained than you may expect because of the short payoff time.

How Does Bridge Financing Work?

As mentioned, bridge financing is asset-backed. This means that it is secured against the property you currently own, almost always real estate. For residential real estate deals, this will typically be a loan secured by your home equity.

There are a few ways that it can work. You can use the loan as a way to pay off your current mortgage, allowing you to secure financing for the new property. Alternatively, you can use the loan for a down payment on the new property.

In either case, you will be used your equity in your current home to help make buying the new home possible. Typically, the bridge loan is paid in full once the original property has been sold.

How Do Bridge and Hard Money Loans Differ?

Hard money loans are very similar to bridge financing. In fact, bridge lending is often considered to be a subset of hard money lending. However, there are some key differences.

First, hard money loans are financed by private capital. In other words, they are not offered by banks or other traditional lenders. This allows them to avoid some of the restrictive requirements that banks have to follow. Bridge financing can be funded through private capital but may also be offered by a bank.

Second, hard money lending is more flexible in how you use the money. Conversely, bridge financing is used solely for real estate. Furthermore, while both are short-term loans, bridge lending is particularly intended for situations in which it can “bridge the gap.”

What Are the Benefits of Bridge Financing?

This is a valuable form of financing in many situations. These are a few of the reasons you may consider using bridge lending:

  • Fast: One of the main characteristics of bridge financing is that you can secure a loan quickly. Typically, the turnaround is a couple of weeks. In some cases, it can be just a few days. This means that you can secure the financing you need substantially faster than the months needed to close a traditional mortgage.
  • Avoids the Need for a Contingency Offer: When you use bridge lending to help with your purchase of a second property, you can avoid needing to make a contingent offer. In other words, the seller can be confident that your offer will be moving forward. This can put you at a significant advantage compared to people who need to sell their homes to fund their offers.
  • Helps You Avoid Delays: When you use bridge financing, you can avoid the delay of needing to sell your home. If there is a time-sensitive opportunity available, you can move forward with it. In turn, this can potentially mean saving substantial amounts of money or getting the perfect home due to your fast funding.

How Can Bridge Financing Help With Buying a Home?

There are a few ways that bridge lending can help you with your next home purchase. As mentioned, you can either use the money to pay off your current home mortgage or use it to help with the purchase of your new home directly.

In the case of paying off your current mortgage, you have a few options. You can refinance your current mortgage with some additional money from your home equity (a cash-out refinance). This will allow you to pay the down payment on the mortgage for your new home. Alternatively, you can simply pay off your current mortgage and make the down payment another way. In certain circumstances, this will help you to secure a more favorable mortgage on the new home.

Alternatively, you can use bridge financing to cover the new property. Depending on your home equity situation, you can either borrow a down payment on the new home or potentially buy it outright.

No matter how you use your bridge loan, there is one major upshot: you will be able to secure financing for the new home without selling your current home. For the vast majority of homeowners, getting the down payment to buy a new home requires selling their current home. In turn, this requires a contingency offer on the new home. Since a contingency offer can fall through if you are unable to sell your home, it is less attractive to a seller.

Therefore, using a bridge loan can help you make a more competitive offer. Depending on the market, you could save some money or even just have a chance at getting your offer accepted.

What Are the Alternative Loan Options?

Of course, there are many other options beyond bridge financing that can help you with buying a new home in South Florida. These are the three major options available:

  • Cash Down Payment: If you have some cash on hand, you can make a regular down payment on your new home. Traditionally, lenders have asked for 20% down. However, there are many more flexible options available. In some cases, if you make a smaller down payment, you may find yourself needing to pay for private mortgage insurance, which can increase your monthly payments.
  • Home Equity Line of Credit: If you have some equity in your home, you could use a home equity line of credit to cover your down payment. A HELOC allows you to borrow against the portion of your home that you own. It functions a bit like a credit card in that you can use it for all sorts of reasons, and you have a limit that you can borrow against in whatever amount you need.
  • 80-10-10 Loan: This is sort of line a hybrid between a cash down payment and bridge financing. If you want to secure a loan but don’t have 20% to put down, you could put down 10% and borrow the additional 10%. This is two mortgages (one covering 80% and one covering an additional 10%). You can then pay off the second mortgage when you sell your current home. The difference between this and bridge lending is that the 10% loan is secured against the new home, not the original one.

Should You Take Out a Bridge Loan?

Bridge financing can be a valuable tool for many people trying to buy real estate. It has a lot of benefits, especially for people who want to secure a deal or who aren’t ready to sell their home just yet. However, it also has some drawbacks.

On the one hand, you could potentially save money on your new home. Having a non-contingent offer means that you can usually offer a little less and still be competitive. Additionally, you will be able to move more quickly on opportunities, meaning that you may be able to snatch up a good steal.

Conversely, using bridge financing could mean that you end up paying your original mortgage, the bridge loan and the new mortgage all at once. Plus, due to the short terms, bridge financing tends to carry high monthly payments (although some are designed as interest-only payment models). If you are unable to sell your original home in a timely fashion, this can become an untenable situation.

You will need to carefully evaluate your options. Getting the timing of selling a home and buying a new one to line up properly can be challenging. When things don’t work out, you may end up sinking time and money into a deal that simply falls through. So, consider using bridge financing but make sure you understand how it works.

Get Started With Bridge Lending on South Florida Real Estate

Discover more about bridge loans today. With HML Solutions, you could get the right deal on a bridge loan for your new home in South Florida. Contact us to learn more.

How Bridge Financing Helps Small Businesses in West Florida

What is the best type of financing for your business? Many small business owners would be tempted to respond, “The one that has the lowest interest rates,” but that’s not always the right answer. In reality, the best financing is the one that meets your company’s needs at the time. In many common situations that small businesses face, the solution is bridge financing.

What are bridge loans? They’re a type of short-term financing based on business assets. You receive funding based on the value of collateral such as inventory, equipment or real estate.

Traditional Funding Can Take a Lot of Time

One of the problems with conventional business loans is that the approval process can take significant time. We’re not talking about a few days or a week: Traditional loans can require several months before your company finally gets the green light.

Why is the approval process with economic development loans so excruciatingly slow? There are several steps that lenders need to follow. In the case of loans backed by the Small Business Administration, for example, it’s necessary for banks to check the applicant’s qualifications against SBA requirements.

During the application process, lenders have to check the application, look at your financial records, perform a credit check and meet to discuss underwriting questions. It also takes time to perform legal steps needed for the loan agreement, closing and other needs.

The Purpose of Bridge Financing

Fortunately, small business owners have several funding options available to help out in the meantime. That’s what bridge funding is all about. The purpose of a bridge loan (also called gap lending) is to “bridge the gap” with capital while you’re waiting for other sources of revenue or financing.

Ways Bridge Financing Helps Small Business Owners

Bridge loans may not have the same interest rates as long-term loans, but when it comes to flexible, short-term funding, nothing is better. There are many ways you can use this type of loan for your business:

  • Real estate projects: A common way to use a bridge loan is to close on a residential or commercial property while waiting for long-term, low-interest financing to get approved. That way, you don’t miss out on the property of your dreams.
  • Cash flow problems: Sometimes, businesses run into problems paying bills because clients haven’t paid their invoices yet. You can avoid credit problems by taking out a bridge loan in the meantime, then paying it off as soon as your customers pay you.
  • Business opportunities: Use bridge loans to take advantage of volume-based inventory purchases, special discounts on equipment or other opportunities.

The Advantages of Bridge Financing in West Florida

Bridge loans offer incredible flexibility. You can get approved and receive funds in about a week. This type of financing can cover 100% of the cost of equipment, inventory purchases, real estate, emergency needs and other business essentials. At HML Solutions, we’ve been providing this funding option for West Florida businesses for a long time. Contact us to see the benefits for yourself.

Understanding the Difference Between Private Money Loans and Hard Money Loans

Hard money loans and private money loans are two different types of alternative financing. When a business has capital needs that traditional lenders such as banks can’t meet, alternative financing can provide a practical solution.

It’s fairly common for modern businesses to run into this situation due to the strict and often exaggerated requirements many banks have for loan approval. In those cases, having an outside lender available can keep business operations running smoothly and allow owners to boost company growth.

Choosing the right type of alternative financing matters. The more you understand the pros and cons, the better equipped you are to make a great decision and save money. What are the differences between hard money loans and private loans? When are they a good choice for your business?

What Are Hard Money Loans?

Hard money loans are also known as asset-based lending. Sometimes, they’re called bridge loans. This type of financing relies on a business asset to act as collateral for the loan. Many business assets can be collateral: property, inventory, heavy machinery, construction equipment, vehicles and (sometimes) jewelry. Real estate is the most common type of collateral used for ABL financing.

How Does Asset-Based Financing Work?

With a hard money loan, the main factor that affects your ability to get a loan is the asset you choose and its value. This collateral needs to be able to cover the cost of the loan as well as any insurance, closing costs or other fees. It’s also important for assets to be something valuable that is relatively easy to sell.

Next, the lending company has the asset appraised. The loan offered is based on a percentage of the item’s as-is value. You decide if the amount covers your needs, and sign the necessary paperwork if you agree. Funds are transferred to your bank account quickly and you can spend them as you see fit.

What Are Private Loans?

Private lenders make up a large category of non-traditional financing. Angel investors, venture capitalists, friends, family members, businesses and other sources are types of private lenders. They’re different from conventional loan sources such as banks both in loan types and loan requirements.

A private loan can have virtually any kind of terms imaginable. Some family members may give you a smaller loan with no interest whatsoever. VCs and angel investors may want some type of equity in your business in exchange for money. Other private lenders offer short- and long-term financing but with a range of interest rates.

What Terms Do Private Loans Carry?

Private loans don’t have any specific definitions or guidelines to follow, aside from following U.S. laws regarding lending. There is a huge range of repayment terms, fees, and interest rates with this type of loan, and the specifics mainly come down to who you decide to work with.

What Are the Advantages of Hard Money Loans?

Many businesses use hard money lending because of the benefits it provides. You can evaluate the same factors for your business.

Fast Financing for Business Emergencies

Sometimes, a business needs working capital right away. For example, a piece of equipment may break down and need repairs. If this is one of your primary sources of revenue, you can’t afford to wait weeks or months to get money for it. The same situation can happen if you have a slow month and you need some help covering payroll or taxes.

Hard money loans can get approved in about 5–7 days max, and sometimes in just a few days. That’s much faster than traditional loans that require weeks for underwriting, credit checks and meetings. You can get working capital to cover business emergencies without problems.

Fast approval is also important when you need a bridge loan for real estate. If you come across a great property from a bank auction, you need financing quickly to close on the real estate before other buyers can get their hands on it. Many house flippers rely on bridge loans to make solid profits from house sales.

Simple Application Process and Qualifications

Another advantage of ABL financing is that you don’t need to dig up tons of financial records. Often, the documents you mainly need are related to the business asset you’re choosing as collateral. There’s no credit check to worry about.

Compare that to traditional loans (and many private loans) and you can see why this option is so popular with small business owners. Most banks want to see years of profit-and-loss forms, tax returns and other financial documents, in addition to hard credit pulls. It takes time to gather all those records, and filling out the application can be a major headache.

Low Credit Score Requirements

One of the biggest differences between hard money loans and traditional loans are the credit rating requirements. With a bridge loan, your credit score doesn’t matter. Alternative lenders don’t even run a credit check with this type of loan. It’s not necessary because collateral reduces the risk of lending.

This is very different than the credit history requirements of most banks. They often require a nearly spotless credit history and a high credit rating. Sure, businesses can get excellent interest rates if they have excellent credit, but if not, banks won’t even consider the application.

Flexible Loan Terms

Compared to traditional loans, hard money financing is amazingly flexible. With conventional lenders, it’s your company that has to adapt to the terms of the loan you’re offered. You don’t get much of a say in interest rates, repayment terms, down payments or additional fees. You either have to accept the loan agreement or find another lender.

With ABL financing, the opposite is true: Hard money lenders are happy to adjust the terms of the loan so it’s more comfortable for your particular business operations. Seasonal businesses can get repayment terms that fit the ups and downs of their schedules. You can negotiate for things such as a longer loan length, no prepayment penalties or lower monthly payments.

No Rules for Spending

When you use business assets to get a loan, you don’t have to worry about rules from banks telling you how to use the money. You simply receive a lump sum right away that you can spend however you want. There are many things you can take care of with extra working capital:

  • Inventory purchases
  • Operating costs
  • Website development
  • Digital advertising
  • Real estate purchases
  • Remodeling costs
  • New computer systems or equipment

This is different from bank mortgages or small business loans. Those financing options come with very specific limits you have to follow, sometimes requiring you to submit receipts showing how you spend the funds.

Pros and Cons of Private Loans

How do private loans stack up against hard money financing and traditional loans? Let’s start with the advantages:

  • Funding for investments that are too risky for banks
  • Flexibility for loan terms and monthly payments
  • Low credit score requirements
  • Ability to spend money the way you want
  • Possibility of very low interest rates

The truth is that there is a huge range of possibilities with private lending. If you get a loan from a friend or family member, you may not pay much in interest, which can save you a lot of money in the long run. At the same time, private lenders often don’t have a huge pool of funds to draw from, so your loan may be on the small side.

Risks of Private Lending

A large downside of private money is the issue of trust. It’s wise to be careful when approaching any loan, but you need to be especially cautious with private lenders. Otherwise, you may end up with a loan that looks good at first but has hidden penalties in the fine print that leave you with huge debts. If you decide to go this route with friends or family, make sure to put everything in writing to avoid any disagreements in the future.

What Are the Terms for Hard Money Loans?

The specific terms depend on the asset you choose, its value and the repayment schedule that works for you. There are many options for repayment terms, generally lasting from six months to a year. ABL financing is designed as a short-term funding solution. As for the total loan amount, or LTV ratio, this is usually around 60%–80% of the asset’s as-is value, though this range can vary with the market.

Hard money loans have a higher interest rate than long-term loans, but they’re also much easier to qualify for. Businesses that have trouble getting approved for traditional loans can often get ABL financing without issues. Many large and small businesses in Florida like this type of alternative financing because of its incredible flexibility.

How Can You Decide If Hard Money Loans Are Right for Your Business Needs?

Like any type of financing, asset-based loans have pros and cons. A trustworthy hard money lender should take the time to answer your questions and explain the terms clearly. At HML Solutions, our financing professionals have been helping Florida businesses for a long time. That’s why we have a great reputation. Contact us today to learn more about this flexible financing solution.

Refinancing an Inheritance Property with a Hard Money Loan

When you inherit a property after a loved one passes away, you become responsible for the mortgage. This can sometimes be problematic if you share the property with one or more co-heirs or do not have the funds to cover the monthly mortgage payment. If you need to refinance an inheritance property for any reason, securing a hard money loan from a reputable lender can help.

Why Might You Need To Refinance an Inheritance Property?

Mortgage loans have a due-on-sale clause that requires the loan to be paid in full before the property can be transferred to another owner. The only exception to this rule is inheritance property; federal regulations prevent lenders from invoking this clause when the property is inherited. 

If you are the co-heir of a property, you and the other beneficiaries must reach an agreement on what to do with the property and who is responsible for paying the mortgage. You must buy out the other co-heirs if you want to have full ownership of the inherited property. You may need a large sum of money up front to buy out any co-heirs, and a hard money loan is a quick financial solution that can be paid back quickly and has flexible terms.

Being the sole heir of an inheritance property makes transferring ownership of the property easier. You may assume the mortgage payments of your late loved one. If you cannot afford the monthly payments, refinancing the mortgage loan can help.

How Can You Refinance an Inheritance Property?

If you need to refinance a late loved one’s property, you must first determine whether you are the lone heir or a co-heir. This information can be found in the will of your late loved one. Use the following steps to refinance the mortgage and then use the money you receive to buy out any co-heirs if necessary:

  1. Add your name to the mortgage deed
  2. Compare refinancing rates with various lenders
  3. Get a home appraisal
  4. Secure a lower monthly mortgage

What Options Do You Have Besides Refinancing an Inheritance Property?

If you cannot reach an agreement for refinancing, you may choose to assume the current payment. You may also ask for a loan modification or rent or sell the property to cover costs.

How Can a Hard Money Loan Help You Refinance an Inheritance Property?

A hard money loan is a quick form of financing with flexible terms. You can secure the money you need quickly to cover a large mortgage payment or buy out co-heirs. Repayment periods are usually short, and hard money lenders are usually willing to work with borrowers who have less-than-perfect credit scores.

When you need to buy out co-heirs to gain full ownership of an inheritance property or need a large sum of money to afford a new mortgage payment if you are the sole heir of an inheritance property, a hard money loan may be the right financial solution for you. HML Solutions offers hard money loans with competitive terms, so if you are interested in securing this financial solution to refinance an inheritance property, contact us today to apply.

What To Know About Using Bridge Loans for Construction Projects

It has always been important to have sufficient financing for construction projects in Florida. Whether your business focuses primarily on residential construction and remodeling or commercial development, having access to significant financing can help you reach your deadlines on time.

What has changed in the last decade are the type of loans business owners, real estate businesses, contractors and fix-and-flip businesses choose. It’s becoming increasingly common for companies to use bridge loans for construction. Why are bridge loans popular for this purpose and what are the benefits?

Short-Term Financing for Construction Projects?

One reason why it may seem surprising to see bridge loans on the construction scene is that bridge financing is for short-term needs only. The higher interest rates of hard money loans and other asset-based financing means that you generally want to pay them off as quickly as possible. Usually, for a long residential or commercial development project, conventional mortgages or SBA loans are the options of choice.

Bridge financing started popping up as developers realize that traditional term loans are too rigid to be the only source of funding for construction. You can save money with the lower interest rates, but it’s hard to adapt to the unexpected situations that tend to appear at any construction site in Florida. That’s where the speed and flexibility of asset-based financing truly excel.

Situations When a Bridge Loan Can Save Your Construction Project

These days, the construction process isn’t as easy to plan as in the past. Countless problems or surprises can appear and leave contractors looking for capital. Here are some of the times when you’ll be glad to have bridge financing by your side.

Unexpected Issues With Land, Permits or Homes

Contractors and real estate developers do their best to perform due diligence before breaking ground, but that doesn’t stop unexpected issues from appearing. This situation is common with remodeling projects, fix-and-flip projects, and construction.

Sometimes, providing adequate drainage is more time- and resource-consuming than anticipated. Homes being remodeled may unexpectedly reveal mold problems that are costly to remove. City ordinances may change or permits may take longer than expected to acquire.

In all of these situations, it’s possible to quickly obtain a bridge loan to cover expenses and get the project back on track. The additional interest is a small price for meeting your work deadlines and getting paid.

Rising Materials Costs

Calculating the costs of construction materials is practically an art. These estimates are important for making sure your initial loan is sufficient to cover the full costs of materials during the project. Unfortunately, even the best-laid plans can change if the market increases the costs of certain items overnight. Everything from cement and timber to hardwood cabinets and appliances can shift rapidly based on global supply-chain issues.

Change In Construction Project Scale

The client is always right. That’s still true even if the client suddenly decides to increase the size, style or structural details of the project. How can your business adapt to these sudden changes? A bridge loan can help you cover the difference between the original budget and the new one.

This situation is very common with home building in Florida. New homeowners often have a desire to enjoy the house of their dreams. As the project advances, they may realize that certain layouts or details aren’t what they envisioned. With flexible financing, contractors can adapt to changes in the kitchen, living room, patio and other spaces.

It’s not just contractors that can benefit. Real estate developers should also have a source of financing that reacts to on-the-spot decisions. There are times when it becomes apparent that certain changes are for the good of the project, boosting property value and revenue significantly.

Budget Issues

Even experienced real estate businesses can have budget problems, but this situation is more common with new property investors and house-flippers. Until you have a few construction projects under your belt, it’s not easy to accurately predict how much you’ll need to complete a project. A common tip is to plan your budget, add 50% for unexpected costs and add another 50% to that for good measure.

The good news is that all isn’t lost if you accidentally blow through your construction budget halfway through the project. You can get a bridge loan to successfully bring the project to completion and reap the financial benefits.

Slow Projects

When a project is doable with your team, it’s easier to gauge work speed and delivery times. Things are more difficult with large-scale residential or commercial construction projects. These builds may require coordinating efforts with dozens of different subcontractors. You need to manage electrical, plumbing, HVAC and countless other specializations.

In this situation, it’s common for things to progress more slowly than expected. Sometimes, this is due to weather issues. Often, it’s the human factor. In any case, the longer the project takes, the higher the labor costs. Bridge loans give you a buffer to adapt to delays and hire additional personnel as needed for successful completion.

Heavy-Equipment Repairs

One of the most dreaded things that can happen on a construction worksite is equipment breaking down. If your team relies on that piece of heavy machinery to get the job done, suddenly everything comes grinding to a halt while repairs are scheduled. This can negatively affect any construction business, from small teams to huge companies that perform municipal work.

Bridge financing can help with this situation in several ways. First, you can use the funds to pay for repairs that are outside of your project budget. Second, the financing can also help you absorb the cost of renting replacement machinery in the meantime to keep your workers on the job. That way, other teams don’t fall behind because of the stoppage of a single area of the construction project.

Multiple Construction Projects

Large real estate developers, and even some medium-sized construction businesses, often have several projects going simultaneously. Doing this can help you maximize your profits, but it can also play havoc with your cash flow if you’re not careful.

Keeping your working capital available depends on a careful dance of customers paying and setting money aside wisely for the next project. House flippers face similar challenges related to how quickly the previous home sells.

Gap financing is an incredible tool for helping with cash flow for any business. It’s perfect for providing extra capital when you need it. As soon as you get paid or sell a home, you can use part of the proceeds to pay off the bridge loan.

The Benefits of Bridge Financing for Construction

How does construction financing with bridge loans stack up against traditional loans? There are numerous advantages as well as a few disadvantages. First, let’s go over the pros:

  • Fast financing: Construction businesses and fix-and-flip businesses can get approved for a bridge loan quickly. The average time for approval is a week, but sometimes it only takes a few days. In any case, you can get funds much more quickly than with a long-term loan. Even working capital loans from banks usually require several weeks to get approved.
  • Easy qualification: The loan application for bridge financing is a breeze compared to traditional loans. Forget about having to provide endless copies of balance sheets and business reports. You just need to show basic business documents and information related to the construction project.
  • Low credit score requirements: Unlike traditional mortgages, bridge loans don’t require exceptional credit for qualification. Small construction businesses and large developers can apply equally. Even past credit problems aren’t an obstacle; it’s possible for companies that went through bankruptcy in the past to qualify.
  • Amazing flexibility: One of the most popular features of gap financing is that it comes with no strings attached. No one tells you how you have to use the capital or when. There is no deposit schedule requiring the release of funds in small portions as the project advances. Instead, you get the full funding amount right away to use however you see fit.
  • Customizable loan terms: As experienced alternative lenders, we can offer terms that are much more flexible than traditional banks. You don’t have to deal with endless layers of red tape to get the working capital you need. We can customize the repayment terms of your loan so payments are comfortable for your business’s operations.

What about downsides? There’s a tradeoff with any type of financing, and bridge loans are no different. The incredible flexibility, speed and accessibility of gap financing mean that interest rates are higher to compensate for the increased risk for lenders.

For many real estate companies, this cost is well worth the benefits provided. You should analyze your project to weigh the pros and cons before making a decision.

Trustworthy Construction Project Financing in Florida

At HML Solutions, we have an excellent reputation with contractors, fix-and-flip companies, real estate developers, construction businesses and other companies. We provide great rates and terms that adapt to your project goals. Above all, our team is committed to helping your business at every step. We’re happy to answer your questions and help you select the right loan options for your current needs. Contact us right away to learn more.

How Bridge Loans Help 4 Industries in Florida

There are many different industries in Florida, but what they all have in common is a need for capital. Regardless of whether your company handles sales, manufacturing, construction or another area of business, you need funds to increase growth. Bridge loans are an amazing tool for increasing your company’s working capital on demand. This type of financing is popular with Florida companies of every size, from small businesses to large corporations.

What Are Bridge Loans?

Before we get into the specifics of what type of industries benefit most from bridge financing, it’s helpful to understand more about this type of funding option. Put simply, a bridge loan is a short-term loan designed to provide flexible working capital quickly. Sometimes, bridge financing is used to handle business emergencies, but most of the time it’s simply an everyday financial tool that companies use to manage their cash flow.

What Industries Benefit the Most From Bridge Loans?

Many companies like the freedom that gap loans provide. In Florida, bridge financing is especially helpful for four industries.

Manufacturing Businesses

Manufacturers have a front-loaded business model. They have to invest money at the beginning of a project to purchase a large number of raw materials for production, in addition to paying dozens or hundreds of employees.

These businesses don’t get paid until after the production process is finished, goods are shipped and invoices are paid. This timeline can last over a month from start to finish.

Gap financing can be an enormous help. With a bridge loan, manufacturers can get sufficient capital to pay for raw materials, cover payroll and take care of operating expenses. Once the client pays, a portion of the revenue can pay off the financing and the rest is profit.


Another industry that has an ebb-and-flow relationship with income is construction. From general contractors to electricians, virtually all construction businesses have to purchase materials at the start of a project, take care of necessary permits and pay a large team of employees and subcontractors.

Contractors usually don’t receive payment until the project is complete, which can put a squeeze on available capital, especially if unexpected problems such as mold appear. Fortunately, with bridge financing, construction businesses can keep operating smoothly no matter what.

Real Estate

Real estate businesses, house flippers and develops use bridge financing a little differently. Here, the objective is to get a large amount of capital quickly to close on the property. After that, it’s possible to transfer the short-term loan balance to a long-term loan, or sell the property and pay off the bridge loan with the proceeds.

Service Industries

Several companies fall into this category: landscapers, plumbers, janitorial companies, HVAC contractors, interior designers, automobile repair shops — even doctors. Many of these businesses have cash flow issues, especially small businesses. Bridge loans help stabilize your cash flow and provide money to keep running your company without problems.

How Can Bridge Loans From HML Solutions Help Your Business?

Get the financing you need quickly and easily. Make decisions that benefit your company without constantly having to check if you have sufficient funds available. Contact our team right away to learn more.

Why Real Estate Investors in South Florida Should Use Bridge Loans

The real estate market in South Florida is very active. A favorable confluence of a good economy, great weather, and people from other states moving to the region in droves have contributed to this trend. Real estate investments in South Florida are in vogue and quite lucrative at this time.

Here at HML Solutions, we want to partner with real estate investors. Although the opportunity for profits abounds, it may require a bit of up-front capital to obtain the investment properties that you have in mind. Not everyone has sufficient cash in the bank to purchase a good real estate investment. But, we don’t think that that should deter you.

We believe that bridge loans are one of the best financial vehicles for real estate investors. These are short-term loans, generally with terms of up to 3 years, that are particularly suited for the real estate market. These highly flexible loans are designed to provide quick funding, perfect for a busy real estate market in which properties can move quicker than jackrabbits.

In fact, one of the main benefits of bridge loans is their inherent flexibility. The most commonly are used to facilitate the quick closure of a property purchase. They can also be used for a host of other costs associated with real estate investments. 

We believe that quick-funding bridge loans are better than traditional loans for most real estate investment opportunities. The application process for traditional loans from a bank can take a lot of time and is usually quite intrusive. After the application is finalized, there is a waiting period for approval, after which you may be denied.

Contrast that with bridge loans that provide funding quickly and can be tailored to each investor’s specific purpose and situation. We believe that there really is no comparison.

Sell Then Buy: A Typical Real Estate Technique 

For many real estate transactions, an individual will sell a property that they already own, then use the proceeds to buy the desired investment property that they have in mind. The problem with this approach is that the property being sold may move too slowly to provide the funds to capture the new real estate. Many opportunities are lost because of this.

We believe that loans that “bridge” that typical funding gap make good sense for many real estate investment transactions. A bridge loan provides a clear solution for you to take advantage of these excellent opportunities that you would otherwise be forced to pass on. Our bridge loans offer fast approval and funding, so the seller won’t even know that you need financing to complete the deal. As far as they know, you are flush with cash.

Benefits of Bridge Loans

We believe that you will find a number of hard-to-beat benefits when you obtain a bridge loan from us. Many of these features can be customized to fit hand-in-glove with your personal investment and financial situation. These benefits include, but are not limited to:

  • Loan Structure Options. We offer both fixed-rate and variable-rate bridge loans to the real estate investment community. The best choice for you will be dictated by your personal situation. We can help guide you to the best option. 
  • Low Rates. The interest rates we charge on our bridge loans are highly competitive with other lenders. You can save money with us because of our attractive rate structures. 
  • Interest-Only Loans. We offer interest-only bridge loans. This may be particularly attractive, especially if you expect to pay off the loan in short order, perhaps when the sale of an existing property is expected in a few weeks or months. Interest-only loans do not carry a principal component in the periodic payment schedule, hence they can be much cheaper for the investor taking on the loan.
  • Asset-Based Loans. Our loan programs include asset-based collateralized bridge loans. This may be a preferable option if you have a number of producing properties in your investment portfolio or if your credit history is less than stellar. These types of loans are backed by the value of an existing property rather than by the investor’s ability to pay back the loan by other means.
  • Removal of Contingency. When a home sale contingency is embedded in a purchase contract, the deal may fall through if the buyer is unable to sell an already-owned property first. Our bridge loans can help circumvent the need for such a contingency.
  • Unencumbered Loan Payoff. We do not burden you with prepayment penalties of any sort. If you wish to retire your loan early, feel free to do so without any additional charge. Then, move on to assembling the next piece of your real estate portfolio.
  • Availability to Non-US Investors. We lend to foreign as well as American real estate investors. In particular for foreign investors,  many of whom may not have banking relationships in the United States or an easy way to verify their credentials, our bridge loans are an ideal funding solution. 

Additional Utility of Bridge Loans

Most bridge loans are used to buy properties. There are, however, additional reasons to obtain a bridge loan. Bridge loans could also be used for the following situations:

  • Securing a new tenant
  • Stabilizing the cash flow of the property, or
  • Resolving a short-term issue that affects a property

An example of a short-term, real-estate-related cost that can be addressed by obtaining a bridge loan is an environmental issue with a property that needs mitigation.

Avoid the Traditional Loan Hassle

As we mentioned, applying for and finally obtaining a traditional loan from a bank or credit union can be a burdensome and time-wasting process. A typical scenario, one which you will want to avoid, often follows a course like this:

The loan aspirant contacts a local bank with the desire to obtain a loan for a real estate purchase. He or she is given reams of paperwork to fill out, a credit check to wade through, and then told that the institution will get back to them. The length of time that you wait for a response can seem like an eternity if you are watching other investors attempting to secure the property that you have in mind. In more than a few cases, the institution may deny your application, and you are left high and dry without funding. To make matters worse, your prized property had been snapped up by another investor while you were waiting for approval.

Here at HML Solutions, we want to partner with you, not frustrate your investment goals. Our bridge loan application process is at the other end of the spectrum: it is easy to apply for and a loan decision is made quickly. We believe that the smart decision is to partner with us.

Exit-Strategy Considerations

We find that the clearer your idea on how you plan to pay off your bridge loan, the swifter your approval and funding will be. Our customers generally retire their bridge loans in one of three ways: Payment from the sale of an existing property, payment with funds from other sources, or refinancing with a conventional fixed-rate or cable-rate mortgage.

Be sure to think this through before applying for a loan from us. Depending upon your envisioned exit strategy, we can offer a tailor-made bridge loan that fits perfectly with your expected plan.

National Interest Rate Considerations

Interest rates have been quite low for some time now, making the cost of taking on a loan relatively low. Because of this, the here and now can be an excellent time to take advantage of our bridge loan program. There is no way to know when rates will rise, perhaps considerably. The rise of inflation in recent months does suggest, however, that rates may rise and make the cost of capital more expensive. Regardless of the overall rate environment, when you have your eye on a property, a bridge loan may be the best bet for your funding.

Aspects To Keep In Mind

We would be remiss if we didn’t touch on the following considerations. Bridge loans can be a near-perfect vehicle for many real estate investors because of their flexibility, quick funding, and easy application process. Keep in mind, though, that bridge loans may carry higher interest rates than other types of loans. We believe that this will not deter too many investors, because these loans are generally paid back quickly and the total interest cost can be relatively small. Also, if an investor has other loans or debts, the adding of an additional loan needs to be thought through carefully. 

Closing Summary

Bridge loans can be the ideal solution for short-term funding gaps that commonly arise when real estate investments are under consideration. Here at HML Solutions, we strive to help investors overcome any funding shortfalls that they encounter. If you are looking to purchase residential, industrial, commercial, or land assets, we are here to help. Our bridge loan program provides highly flexible funding with speedy approval and quick arrival of capital.  Don’t let a shortfall of cash thwart your plans. Give us a call today and keep your investment program on a firm footing.

8 Ways To Use Hard Money Financing

If you haven’t used hard money financing before, it’s natural to have some questions. Many companies are turning to this flexible, fast and simple loan option. At HML Solutions, we’ve helped countless businesses in Florida, from construction businesses to real estate developers. How can you use a hard money loan to benefit your business?

Real Estate Purchases

In Florida’s high-speed housing market, you need capital if you want to snag the best deals on real estate. Hard money loans are fast, often providing financing in as little as a week. That way, you can close on hot properties before other buyers get a chance to start a bidding war.

Fix-and-Flip Projects

Whether you have your eyes on a bank foreclosure property or a house with a heart of gold that needs a lot of work, hard money financing can help. You can use this type of loan to purchase property, cover the cost of renovations, hire contractors and buy materials.

Asset Liquidations

Sometimes, it can take a while to sell a property you’ve inherited. The same thing goes when businesses want to sell heavy machinery or another type of equipment. If your company needs funds in the interim, hard money loans can cover your operations until the asset sells.

Business Acquisitions and Buyouts

Acquiring a business or buying out a business partner generally requires obtaining a large amount of capital in a short period. You don’t have months to wait for a long-term loan, and you can’t count on revenue until you complete the negotiations. That’s where short-term financing is a huge help.

Investment Property Improvements and Repairs

Property managers typically have a hard getting approved for traditional financing for property improvements. Lenders don’t see the value. Hard money loans are much more flexible. With high-value improvements, you can increase your profits every month from your commercial and residential rental properties.

Cash Flow Stabilization

Any business that has cash flow issues can benefit from hard money lending. Cash flow problems aren’t the same thing as low sales volume. A company can sell more than enough every month but still run out of funds if customers take forever to pay. With a hard money loan, you can cover financial needs while waiting for client invoices to come due.

Loan Deadlines

Can you honestly use a short-term loan to help cover payments on a long-term loan? Yes, if it’s a hard money loan. This type of financing is based on business assets, so it doesn’t hurt your credit to apply at the same time. You can cover the urgent loan payments until your revenue picks up enough to take care of the rest.

Credit Score Problems

Traditional loans — even SBA loans — are tricky to qualify for if you have past credit issues. Most banks won’t even seriously consider your application. With a hard money loan, it’s different. What matters is the value of your asset, not your credit rating.

These are just some of the benefits you can get thanks to hard money financing. To get started, contact us today for more information.