Loan proceeds may be used for any number of business and commercial purposes and often aid the borrower in taking advantage of pending opportunities. The ability to rapidly transform existing real estate equity to cash is often the difference between being able to take advantage of an opportunity or letting it pass. The following is a list of some of the most common types of situations in which loan proceeds may be used.

Property Acquisition  

There are a variety of ways in which bridge financing can help facilitate the acquisition of real estate. Using other collateral to finance all or a portion of the down payment, or providing temporary first lien financing after the down payment, are only two of the possibilities. In other situations, funds may be needed to extend a closing date or due diligence period, or provide soft costs in connection with obtaining a building or other permit prior to closing.

Investments  

Loan proceeds can be used to start a business, help finance an existing business, purchase partnership or other interests, or buy out a partner or associate.

Refinancing 

There are times when it is advantageous to refinance property. In some cases a due date that the parties believed could be extended, could not,  and there is insufficient time to acquire conventional financing. In other cases, the holder of a mortgage has offered, or previously agreed to, a discount for early payment.

Tenant Improvements 

When a property owner enters into a lease, particularly of a substantial amount of office or other space, the cost of completing improvements required by the tenant prior to the commencement of the lease can be substantial. Since recovery of the amounts spent in this endeavor will be spread out over the lease term, financing is often sought to fund the initial investment.

Construction 

Equity Funding can facilitate these loans as long as sufficient equity is available in the underlying land and/or additional collateral from the borrower. This type of loan can help fund the project from inception, or help with overruns as construction is being completed.