Simran Bindra Discusses Benefits of Bridge Loans in Commercial Real Estate
May 22, 2024
Thompson Coburn partner Simran Bindra authored an article in Western Real Estate Business on the ways bridge loans can effectively provide safety for borrowers and lenders. “In an environment where both borrowers and lenders are waiting for something better to come along, one option is a bridge or transition loan,” wrote Simran. “The current use of the bridge loan is to seek shelter from the storm (or, less optimistically, kick the can down the road). The earmarks of a bridge loan are a relatively short term — perhaps one to two years with a potential extension option — and an interest rate in excess of the rate that would typically be associated with a permanent loan.”
Simran explained that although bridge lenders typically require either significant equity investment or credit-worthy sponsors, “when everything aligns, bridge loans can be a significant win for the borrowers and its equity investors.”
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