Asset Based Loan Vs. Bridge Loan

Many businesses are having problems in this financial market getting the money needed to finance business deals. When traditional banks are not offering quick loans, there are two directions that can be taken to obtain financing.

Asset Based Loan

Asset based loans are based upon a commercial borrower's tangible assets. These can compromise inventory, machine equipment, and/or accounts recievable. If the borrower defaults on the loan, the lender can take the assets over. Most companies obtain asset based loans when they cannot find more secure forms of financing.

A difficulty of obtaining an asset based loan comes from the percieved outlook for the borrower's company. Since they are unable to get financing through normal means, some investors can view obtaining a asset based loan as a sign of financial difficulty in the firm. This can hinder chances of getting financing in the future.

Bridge Loan

Often a commercial borrower needs a bridge loan to facilitate the financing of a property for a short period of time. A bridge loan is a specially designed form of financing that is used when a borrower is expecting to sell a property quickly or refinance it within the near future.

When a borrower is looking for a bridge loan, they are trying to obtain financing just until they can obtain the financing. There is quite a bit of risk for the lender which is why interest rates are high for a bridge loan, but since they are obtained primarily to find the time to obtain longer term financing, they are not looked on as negativly as asset based loans.

The benefits of SNC bridge loans...

• We accept 1003 loan applications to expediate the loan process
• We are a direct lender, not a mortgage broker
• There will be less paperwork and red tape
• We control the interest rates and can pass the interest savings on to you

Security National Capital offers bridge loans on a variety of commercial properties including apartments, retail, industrial, office, health care and mixed use. When a bridge loan is made, we look for an "exit strategy" to be certain that our borrowers have a plan to retire the loan through selling or refinancing the property. Bridge loans are usually offered for terms of 12-24 months and many can be refinanced into low cost, long-term financing through Security National Capital. Bridge loans are not only for shorter terms, but are also often needed to close quickly.

The bridge loan interest rates vary and are changing constantly. The best way to find out what terms you will receive on a bridge loan would be to call us and spend a few minutes on the phone while we analyze you specific financial needs. Our minimum loan amount is $500,000 with a maximum of $5,000,000. Our goal is to assist you quickly and courteously with your bridge loan financing request.