What determines the loan amount financed?
First and foremost, loan-to-value (LTV). Any commercial purpose real estate can serve as collateral, with LTV limits between 50-70%. CCL bridge loans are asset-based and not credit-based in the traditional sense. There is a vast range of business scenarios that our commercial borrowers face, and we put the most weight on collateral value.
What secures the loan?
CCL files a first lien Deed of Trust on the subject property.
Does CCL finance homesteads or owner-occupied properties?
No, we lend strictly to owners of commercial properties that have a business use. This does include SFR rental properties and multi-family developments, both of which have tenants. But we do not finance bridge loans for homeowners on their primary residence.
What are the terms of the loan? Cost, rate and fees
(borrower cost, upfront cost)
- 12-24 month terms.
- Extension options on a case-by-case basis.
- Interest rates are competitive and vary, based upon LTV and business circumstances.
- “Prepaid Interest” Reserve option, with no payments made during loan term; otherwise monthly interest-only payments.
- Borrower may elect to pay closing costs out of pocket; but there are no out of pocket expenses if the loan LTV limit allows room for all fees to be rolled in.
What range of loan amounts does CCL finance?
Traditionally, our loan sizes begin at $500,000 and max out at $10,000,000 per parcel and/or individual guarantor. Above that loan amount, however, we can still get the deal done through our parent company’s institutional finance infrastructure. We have not seen loan too big for us to accommodate.
Why would a borrower choose a hard money loan
instead of conventional bank financing?
Bridge loans are often a bridge to long-term conventional financing. The two factors that make asset-based loans the short-term fit: time and flexibility. When a time-sensitive acquisition presents itself, bridge loans are a simply a faster option. Typically, they come with a much faster application and approval process. Private money lenders often do consider the financial strength and credit of their borrowers, but these are secondary factors. The primary factory considered is the value of the subject property.
What if I have been through bankruptcy or foreclosure?
Will that disqualify me from a bridge loan?
Many types of hardships affect traditional creditworthiness. Private asset-based lending gives much less weight to these factors than conventional financing. CCL has less restrictions around bumps and bruises that might be deal-breakers for traditional banks.
What are the loan costs a Borrower is responsible for when obtaining
a commercial bridge loan?
- Attorney’s fees
- Title insurance policy
- Credit or Background check(s) if applicable
What information do we need from the Borrower to begin the loan process?
Although every Borrower’s situation will vary, here is a checklist of items needed to get the process started. Not all items on this list necessarily apply to your transaction. If you have any questions about what is required, or need help gathering any of these documents, please do not hesitate to contact us. Our online quick app will walk you through it as well. It’s quite simple.
- Loan Application and Personal Financial Statement – for each Guarantor
- Stated business purpose for property securing the loan
- Valid Gov’t Issued Photo ID – for each Guarantor
- Last 2 years of tax returns – business & personal
- Last 4 months of bank statements – business & personal
- Corporate Docs, If Commercial Entity, to be approved by Lender counsel
- Copy of most recent Subject Property survey
- Certificate of Hazard Insurance, if applicable; ex. Flood Hazard Area
- Most recent mortgage statement, if applicable
- Proof of 12 months pre-paid insurance, naming Lender a Loss Payee
- Insurance renewals sent to Lender or Lender Servicer
- Resume or Relevant Work History of Sponsor/Applicant
- Project highlights last five (5) years
- Completed Projects
- Sample Photos
- Proposed Draw schedule for subject property(ies)
- Lender references, if applicable
- Other references, if applicable – municipal, contractor, etc.