Bridge Loans in California
For those in California’s fast-moving real estate and business market, waiting months for traditional financing can mean missing out entirely. Bridge loans offer a powerful alternative, providing quick access to capital when timing matters most. At Westpark Loans, we know the importance of offering short-term financing solutions designed to “bridge” the gap between immediate funding needs and long-term financing arrangements. Bridge loan financing options in California typically last anywhere from a few weeks to 18 months, with most falling in the 6–12 month range.
The bridge loan process typically begins with a simple application that focuses on the value of the collateral rather than extensive financial documentation. Bridge loan lenders in California are able to make decisions based on the current value of the collateral property rather than personal credit history. We’ll consider the borrower’s exit strategy for repaying the loan and the basic creditworthiness and ability to service the debt when making loan decisions.
Bridge Loan Features and Terms
| Feature | Bridge Loans |
|---|---|
| Loan Type | Real estate-secured short-term loan |
| Lien Position | 1st or 2nd Lien Position |
| Loan Term | 6 months – 36 months |
| Interest Rates | Fixed and Adjustable Rates Available |
| Loan Amount | $100,000 – $5,000,000 |
| LTV | Up to 75% |
| Credit Score | 600 min |
| Occupancy | Primary residences or Investment properties in California; Investment properties nationwide |
| Property Types Allowed | 1-4 unit residential, multifamily, commercial |
| Prepayment Penalty | Flexible |
| Closing Time | 10-15 days |
What is a Bridge Loan?
Bridge Loans are short-term loans designed to provide immediate cash for borrowers who need quick funding. Bridge loans can be used for real estate purchases, refinances, or cash out.
Business purpose bridge loans can be used for investment property purchases, or for refinancing or getting quick cash out of both owner-occupied and investment properties. Because they rely mainly on the value of the property, they require very limited documentation, and are often called “no doc” or stated income loans.
Consumer purpose bridge loans can be used to purchase a property before selling an existing one. These hard money loans are secured by the borrower’s current property and are typically repaid once the original property is sold.
Bridge Loan Features and Benefits
Quick Cash Out: Business-purpose bridge loans offer the quickest way to get cash out of both owner-occupied and investment properties.
2nd Lien Option: Bridge Loans can be in 2nd lien position, allowing borrowers to keep their low interest rate first mortgage in place.
Fast Approval and Funding: Bridge Loans offer a quick approval process, often within days, ensuring you can secure funding swiftly.
Flexible Terms: These loans provide flexible terms, allowing borrowers to customize repayment schedules according to their needs.
Less Stringent Credit Requirements: Bridge Loans focus on the value of the property being used as collateral, making them accessible to borrowers with less-than-perfect credit and limited or no income documentation.
High Loan-to-Value Ratios: Borrowers can benefit from high LTV ratios, ensuring substantial financing for property purchases.
Short-Term Financing: These loans are typically short-term, ranging from 6 months to 3 years, making them ideal for real estate investors and property flippers.
Who Would Benefit from a Bridge Loan?
Real Estate Investors: Investors looking to quickly purchase and renovate properties can benefit from the fast approval and flexible terms of Bridge Loans.
Self-Employed Borrowers: Those who may not qualify for traditional loans due to inconsistent income can leverage the less stringent credit requirements of Bridge Loans by getting a business-purpose quick close 2nd on primary residences or investment properties.
Small Business Owners: Business owners needing quick access to capital for property investments can utilize Bridge Loans for their business purpose financing needs in either 1st or 2nd lien position on both primary or investment properties.
Property Flippers: Individuals looking to buy, renovate, and sell properties quickly can benefit from the short-term nature and fast funding of Bridge Loans. Make an all-cash offer backed by a bridge loan, and close in as little as 5 days.
Bridge Loan Example
Emily and David, small business owners in Irvine, California, needed cash out for business improvements to expand their operations. By securing a Bridge Loan in second position on their owner-occupied property, they leveraged the equity in their home to qualify for the loan. They cashed out $250,000 from the bridge loan to fund the business improvements, significantly boosting their business operations and revenue.
- Location: Irvine, California
- Property: Owner-occupied primary residence
- Property Value: $1,200,000
- Current Amount Owed (1st Position): $400,000
- Loan Type: Bridge Loan (2nd Position)
- Loan Term: 36 months
- New Loan Amount: $250,000
- Combined Loan to Value (CLTV): 54% (calculated as ($400,000 current debt + $250,000 new loan) / $1,200,000 property value)
Westpark Loans helped Emily and David get loan approval and cash out $250,000 in just 10 days. This strategic move enabled them to enhance their business operations and significantly increase their revenue, all while keeping their CLTV at a manageable 54%.
Frequently Asked Questions
A business purpose loan is a type of financing used for business-related expenses such as purchasing property, renovating facilities, expanding operations, or managing cash flow, rather than personal or consumer expenses.
Bridge loans provide quick short-term financing to bridge the gap between where you are and where you want to be.
Bridge loans typically have terms ranging from 6 months to 36 months.
Yes, bridge loans are secured by real estate collateral. Westpark Loans only offers loans secured by real estate.
No, bridge loans are intended for short-term use until permanent financing is secured.
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