Bridge / Mezzanine Loan:

Bridge loans are typically more expensive than conventional financing to compensate for the additional risk of the loan. Bridge loans typically have a higher interest rate, points and other costs that are amortized over a shorter period, and various fees. The lender also may require cross-collateralization and a lower loan-to-value ratio. On the other hand they are typically arranged quickly with relatively little documentation. A bridge loan is interim financing for an individual or business until permanent financing can be obtained.

Mezzanine financing is a hybrid of debt and equity financing. It is generally used to finance the expansion of existing companies. Basically, it is debt capital, with current repayment requirements, but with rights to convert to an ownership or equity interest in a company. It is generally subordinated to debt provided by senior lenders (such as a bank) and is referred to as subordinated debt. Mezzanine financing is advantageous in that, on the balance sheet of a company, it is treated like equity and may make it easier to obtain standard bank financing.

Loan Programs:

Bridge Loan

Mezzanine Loan

Property Types: Multifamily, office, retail, industrial, hospitality, and specialty properties Multifamily, office, retail, industrial, and hospitality
Loan Amount: $2MM to $75MM $2MM to $50MM
Terms: 1-3 years, with possible extensions 2-10 years
Collateral: Senior Mortgage Second mortgage or secured by equity interests
Loan-to-Value:

Up to 70-80% (Standard)
Up to 80-90% (Stretch)

Up to 90%
Recourse: None, except for standard carve outs None, except for standard carve outs
Pricing: LIBOR based rates and fees adjusted for risk and leverage Competitive rates and fees adjusted for risk and leverage
Geographic Area: Nationwide Nationwide
Borrower: Special purpose entities controlled by experienced owners and operators of commercial properties Special purpose entities controlled by experienced owners and operators of commercial properties