Since bridge loans are often used in commercial real estate transactions, a lot of people are under the impression that bridge loans are a type of mortgage. But are they? In today’s post, we provide an answer: keep reading to learn more!
Is a Bridge Loan a Mortgage?
The short answer is no, bridge loans are not technically mortgages, even if they often come in handy in real estate transactions.
Simply put, a bridge loan (also called swing loan or interim financing) is a form of short-term financing solution designed to fill a gap in financing and be repaid between six months to one year.
A mortgage, on the other hand, is a long-term loan used to finance the purchase of land or a property (residential or commercial).
And even though bridge loans can use a property as a collateral just like a mortgage does, they are not considered mortgages because they are designed to be repaid in the short term. Instead, bridge loans fall within the category of non-mortgage loans or specialty finance.
What Are Some Alternatives to Bridge Loans?
Of course, bridge loans are not for everyone. But don’t worry: at Gellyfish Commercial, we have a full range of financing solutions to help you and your business succeed.
- SBA loans. These loans are partially guaranteed by the Small Business Administration, and offer more convenient terms and rates than conventional loans. However, with these loans you have to use the loan proceeds in very specific ways dictated by the SBA.
- Conventional loans. If you want to repay your loan over a long period of time without the constraints of an SBA loan, conventional loans are a good alternative.
- Revenue-based loans. If you can’t qualify for other types of loans, revenue-based loans may be the answer. Here, instead of paying an agreed-upon amount each month, you repay your loan with a percentage of your profits.
To learn more about business financing, check out our previous blogs, “Business Loans vs Overdrafts: Which One Is Best?” and “Can you Use a SBA 504 Commercial Loan for Renovations?”
Gellyfish: Business Financing Made Easy
Looking for business loans that combine flexibility and certainty of execution? Gellyfish Commercial is the answer!
Contact us today by email (email@example.com), telephone (877-800-4493), or social media (Facebook, Twitter, LinkedIn), to schedule a free consultation or to learn more about our financing solutions.