Bridge Loans - Continued...

Will a bridge loan work for your project's capital funding plan needs?  Surprisingly enough, the typical answer is a firm "no, it won't help," because bridge loans are based upon an underwriting of the borrower's credit capacity, the revenues generated by the business on a routine basis and the availability of collateral that is sufficient to retire the bridge loan in the event of default.  Bridge loans are made to bridge one material condition to another within a given timeframe, but are always applied to existing properties - not to new construction projects.

The key to understanding the bridge loan underwriting process is to understand that the lender is not an equity investor, but is providing you with the sole opportunity of reducing your long-term at-risk capital contributions and not providing equity sources you may not otherwise already have.  In this particular instance, the bridge loan is not suited for the capital funding plans for use in the information-rich business environment of the 21st century.

In today's capital markets, it is not unusual to see a capital funding plan with more than five (5) elements as a result of the application of investment incentive entitlements as annuities that replace equity and/or augment the equity contributions the developer would otherwise have to provide as a condition precedent to commencing development of a commercial real estate project.  The key element in replacing the need for a bridge loan is to understand how the investment incentives can be applied.  In the case of most commercial real estate development programs there are multiple incentives available including:

Make your next project work for you by inculcating the incentives from the beginning in a way that doesn't create a massive equity dilution of your interests.

About Rainmaker...

Rainmaker Marketing Corporation is the brainchild of Clint Lovell, a seasoned business finance consultant with more than 20 years experience.  Rainmaker is a B2B consulting firm that was incorporated in 1994 for the purposes of providing market feasibility studies to businesses seeking capital financing in the commercial and institutional markets.  Today, Rainmaker Marketing Corporation provides a comprehensive array of due diligence documentation services for most major industry groups.  Rainmaker Marketing Corporation also provides syndication management services for fractional commercial real estate syndicates that can provide mezzanine gap funding for income-producing commercial property developments as early as the pre-construction phase.  Rainmaker Marketing Corporation serves clients throughout North America and the Caribbean Basin.

Rainmaker Marketing Corporation, Inc.

15519 Dawnbrook Drive, Houston, Texas 77068

281.537.1200  

consultants@rainmakermarketing.com