Bridge Loans
If you plan to build a facility, you will likely need a short-term loan to bridge the gap between development financing and permanent financing. Bridge capital, which includes mezzanine debt, is also useful for refurbishing your property or recapitalizing your loan. As a direct lender, our competitive financing options allow us to meet your unique requirements with a well-structured loan that has favorable terms and low interest rates. Contact us to ask how we can help you with your financing needs.
BRIDGE LOAN TERMS
INVESTMENT AMOUNT: $1,000,000 and up
INVESTMENT TERM: Minimum 5 years, accelerated upon sale of project
INVESTMENT %: Negotiable based on stage of lease-up – Generally 75% loan-to-value, with mezzanine and equity structures available for up to 90%
INVESTMENT STRUCTURE:
First mortgage, payable interest-only at 8% per annum – SSC will allow accruing interest during lease-up
UCC filing on the equity interest of borrower if mezzanine or junior debt
Equity participation may be required depending on risk of the transaction
Owner grants SSC right of first refusal (ROFR)
Professional Management Required
AMORTIZATION: Interest only – No required principal payments before maturity
ORIGINATION FEE: Generally 1%
PREPAYMENT FEE: 3-2-1-0 after 3-year lockout
DUE DILIGENCE DEPOSIT: Paid by borrower including legal, appraisal and environmental
RECOURSE: Non-recourse subject to customary “Bad Boy” and environmental carve-outs
COVENANTS: Debt service coverage – Customary affirmative and negative covenants
INTEREST RATE: 8% fixed
UNDERWRITING SCHEDULE: Closing as quickly as two weeks – Subject to receipt of standard third-party reports
THE BEST CHOICE FOR SELF STORAGE BRIDGE FINANCING
Bridge Financing
This type of funding can be used to refurbish your property, refinance your loan or pay off a construction loan that has matured. It is a useful, customizable tool within self storage finance.
Mezzanine Financing
This funding is a combination of debt and equity financing that begins as debt but converts to equity if the loan is not paid on time or in full. It is called “mezzanine” because it resides between senior debt and equity.
Junior Mezzanine Financing
Broader in scope than mezzanine, this funding encompasses subordinated debt as well as preferred and common equity. It is yet another way we can customize funding for your personal needs.
