At First Financial Tax Group, financial advisor Barry M. Kornfeld works to assist clients in the Boca Raton area with safer financial alternatives such as the purchase of first position commercial mortgage notes. An FPCM note is a short-term bridge loan that is secured by commercial real property. The safety factor lies in the fact that the property is worth considerably more than the bridge loan at time of closing. Barry Kornfeld and his team work extensively with a customer base that includes pre & post-retirement individuals who are seeking secure income-generating strategies. In fact, in today’s environment, their clients enjoy FPCM yield’s of 6% APY or better, with interest that is paid out monthly.
The term “bridge loan” refers to a loan issued over the short term, typically only 1-year at a time. Bridge loans typically cost the borrower a higher interest rate and often come with higher closing costs. It serves as a “bridge” to more permanent, long-term financing. The borrower typically uses the funds in the bridge loan as a stop-gap until he or she is able to obtain long-term credit from another source, like a traditional bank or the public markets, or even a REIT. In one example, a bridge loan might cover a situation in which an entrepreneur needs working capital until a major round of funding comes through.
Bridge loans are also called “gap loans” or “swing loans.” They are very common in the real estate sector, and they can also help a borrower to purchase or renovate an existing property or business and use the resulting new income stream to get on a better financial footing.