Commercial mortgage loans are those taken for commercial purposes i.e. for businesses. In such loans, the business itself is used as collateral for the mortgage. Commercial mortgage loans are a good way to expand the existing business or even to start a new business. Commercial mortgage loans are often used to fund factories, office space, stores and other properties of companies. They can be used for almost any kind of commercial purpose, including purchase of apartments that have five or more than five units.

Commercial mortgage loans are almost similar to regular mortgage loans. They are processed much faster and usually take just 10 days for processing. Though it is generally felt that smaller businesses get mortgage loans at lower rates than those compared to larger businesses, this is not true. The rates for all commercial mortgage loans in Florida are the same. However, the loan options may differ depending on the company, its credit rating, its payment options, and other considerations. Commercial mortgage rates may be fixed or variable. Veterans are given priority while providing commercial mortgage loans because of the services they offer to the country. » Read more: Florida Commercial Mortgage Loans

Do hedge funds make commercial mortgage loans? The answer is unequivocally yes. Hedge funds lend billions to commercial real estate property owners, investors and developers every year. In-fact, during this credit crisis, hedge funds filled an important role by funding deals the banks couldn’t. Many, many properties were saved from financial disaster last year because they secured funding from a hedge fund.

A hedge fund is an investment company set up and managed by Wall Street bankers and funded by wealthy individuals or other cash rich entities, such-as trusts, endowments and corporations small and large. Originally hedge funds were created to “hedge” risks associated with more traditional investing, but today hedge funds are a form or high return investing unto themselves.

Although many are registered with the SEC (Securities & Exchange Commission) they remain largely unregulated and are free to invest as they see fit. The bulk of hedge fund activity involves trading in the equity, debt and derivatives (options, futures, synthetic securities etc.) markets. However, a good number of hedge funds have a real estate component that seeks opportunity by investing in property. It is the funds that have an appetite for real estate that will consider lending against a quality building or a promising development. » Read more: Commercial Mortgage Lending – Do Hedge Funds Make Commercial Mortgage Loans

The commercial bridge loan act as interim financing and is used to quickly close on a commercial real estate property. These types of loans are also used to take advantage of an opportunity that is only available for the short-term or to save real estate from foreclosure. Bridge loans tend to be more expensive than the usual commercial financing options. This is because commercial loans are riskier than conventional loans.

The term, “commercial bridge loan” generally applies to the use of the funds instead of the source of the funding or the guidelines that are imposed during the transaction. In a sense, all commercial loans can be bridge loans. However, normally, the term is associated with programs that fall into the unconventional realm of financing. A good example is when a borrower lacks enough cash equity in a business property; he or she could seek a commercial loan with a 14 percent interest rate and from 3 to 5 points. However, if he or she could make as much as a 30 percent down payment, the borrower might qualify for a conventional mini-perm loan from a bank at up to 3 percent over prime and one point.

Interest rates for commercial bridge loans typically run from 12-15 percent. With terms of 12 months, from two to four points may be levied. The LTV (loan to value) ratios tend not to be greater than 65 percent for properties that have been classified as commercial. » Read more: What Is a Commercial Bridge Loan and How To Get One