RESOURCES
There are many things you need to have in place before you can get approved for a loan such as building plans and permits, construction budgets, market/feasibility study, and an exit plan. If you are a first time developer then you will have a more difficult time acquiring financing since you do not have a proven track record.
Business acquisition loans are a type of small business loan designed for purchasing an existing business or franchise. Regardless if you end up getting a term loan or an SBA loan, there are still quite a few documents that you need to have ready for review. Not only will the lender look at your current business financials (if applicable), but they will also want to look at the financials of the business you are considering purchasing.
There is an order or hierarchy to this type of financing. If you picture a pyramid or triangle, the bottom section represents the senior debt which provides the majority of the financing, the middle section is the mezzanine financing which is the financing that fills the gap between senior debt and equity, and the top of the pyramid is equity financing (the sponsor’s contribution).
Exactly as the name suggests, bridge loans are used to bridge the gap between initial needs and an intended exit. Commercial bridge loans can be used to cover a wide range of transactions: Commercial Real Estate Purchase, Cash-Out, Refinance, Value-Add/Rehab, Development, and Ground-up New Construction.
