When we are talking about bridge financing for construction, we aren’t referring to funding to construction an actual bridge over land or water.

No, instead we’re referring to additional capital for an existing construction project to fund its completion.

This is typically provided by a private mortgage lender that specifically funds these types of requests and is secured by a mortgage registration behind the outstanding mortgages and liens already registered against the property.

To better understand when you would require a construction bridge loan, here are the most common scenarios where bridge financing is sought.

The most common situation is where there are cost overruns in a construction project. Certain items cost more than budgeted to complete, unexpected expenses occur that were not planned on but must be dealt with to complete the project, and on.

In many cases, the construction project is over 90% complete and needs a relatively small amount of money, compared to the total project cost, to complete the remaining work. And its also not unusual that these funds are required quickly in order to avoid any construction delays that could add still more costs to the project.

The second scenario where bridge financing is required for a construction project is when there is a change in scope by the builder, developer, or property owner. This is slightly different than a cost overrun as that is basically out of the control of the developer or contractor. A change in scope is a conscious decision by those in charge to change certain features of the build which will be higher in cost that what was initial budgeted. This could include such things as different windows, a larger kitchen, finished basement, etc.

Because the incremental cost related to a change in scope can be isolated, the bridge financing to complete the work can be arranged for the time that particular work is going to take place.

The third most common situation where bridge financing is required in a construction project is when the primary construction lender is either not providing one or more construction draws on a timely basis, or the lender has cut back on the scheduled draw amount causing a shortfall in the cash flow for the overall project.

While private mortgage lenders are the key suppliers for these construction bridge loans, there are typically only a handful of private lenders that will provide this type of financing.

As a result, its important to be working with a construction mortgage broker who is aligned with construction bridge financing sources in order to gain access to the funds required as quickly as possible.

If you have a construction project that can’t be completed without some additional capital being injected into the cash flow right away, I suggest that you give me a call so I can quickly as your requirements and provide construction bridge financing options for your immediate consideration.

Click Here To Speak With Construction Mortgage Broker Joe Walsh For A Free Assessment of Your Construction Bridge Financing Options

The post Bridge Financing For Construction first appeared on Ontario Construction Loans And Mortgage Financing.

“Toronto Construction Bridge Financing or Bridge Loans Can Be Placed In A Matter Of Days”

A Toronto construction bridge loan is typically required at or near the end of a construction project to provide the cash flow necessary to complete all the work and/or sell off completed units.

There can be many reasons for a construction bridge loan including cost overruns during the project, changes in scope that added to the overall project costs, delays in draw advances or draw cut backs by the construction mortgage provider all ready in place, and so on. Regardless of the reason why funds are required, the situation typically calls for immediate access to the additional capital required so that the project doesn’t slow down or stall out completely, creating even more costs or worse for the owner or builder.

Because the construction bridge financing is sought near the end of the project, the work done to date has increase the property value and most of the construction risk has been eliminated, providing a fairly straight forward picture for a private mortgage lender to finance against. Like all construction loans, a construction bridge loan is secured by a mortgage registered against the property behind whatever current mortgages are in place. From the time of application to funding, a construction bridge financing mortgage can be put into place in two to five business days which is about as fast as mortgage related financing gets.

The key to getting a Toronto construction bridge loan in place quickly is to work with a construction mortgage broker who has direct private lending sources that are prepared to provide these types of loans on very short notice. In addition, the mortgage broker will need to have a good working relationship with a real estate lawyer who is ready and willing to turn the documentation around quickly. Without the team of construction mortgage broker, lawyer, and private mortgage lender working closely together, its highly unlikely that anything will happen right away which can put even more pressure on your project. In many cases, the bridge financing amount requested is less than $100,000, which allows the private lender to make a very quick decision without having to get into an excessive level of detail during the application and assessment process.

If you require a Toronto construction bridge loan, I recommend that you give me a call so I can quickly assess you requirements and provide relevant construction bridge financing options for your immediate consideration.

Click Here To Speak With Toronto Construction Mortgage Broker Joe Walsh

The post Toronto Construction Bridge Financing first appeared on Ontario Construction Loans And Mortgage Financing.