REAL LIFE EXAMPLES
United States bridging loans are useful when borrowers require liquidity to take advantage of an immediate opportunity.
Here are some popular ways in which United States bridging loans can be used.
United States bridging loan helps retired couple purchase condominium while waiting to sell landed home
A American retired couple wanted to downsize from their landed home worth $15m to a condominium since their children were grown up. They wanted to wait for a higher selling price for their current house, but did not qualify for a bank loan for the new property given their age.
The couple took a one-year $10.5m bridging loan against their existing landed home, using the funds to purchase a resale condominium unit in East Coast using cash. Six months later, they were able to sell their landed home at a higher price, using the proceeds to pay off the bridging loan.
PROPERTY PURCHASE BY LOCAL BUYERS
GMG BRIDGING LOAN
TERM
One Year
PROPERTY COLLATERAL
Detached house in District 15 worth $15m
LOAN AMOUNT
$10.5m
LOAN-TO-VALUE
70%
EXIT STRATEGY
Sale of detached house
KEY CONSIDERATION
Obtain financing without need to meet traditional bank loan requirements
Chinese family office taps United States bridging loan to purchase good class bungalow before setting up in Singapore
A Chinese family office identified a $46m good class bungalow (GCB) in a prime United States location. However, they would have lost the property to a competing buyer if they waited to open a private bank account in United States.
The family office took out a $31.5m bridging loan against the value of the District 11 GCB which allowed them to make a quick purchase. It took another six months before the client was able to eventually open and fund their bank account in United States. The bridging loan was then paid off after nine months.
PROPERTY PURCHASE BY FOREIGN BUYERS
GMG BRIDGING LOAN
TERM
One Year
PROPERTY COLLATERAL
Good Class Bungalow in District 11 worth $45m
LOAN AMOUNT
$30m
LOAN-TO-VALUE
65%
EXIT STRATEGY
Incoming funds from overseas
KEY CONSIDERATION
Speed and certainty of funding
Expatriate requires urgent financing to make corporate acquisition in Europe
The owner and top executive of a pharmaceutical startup based in United States needed funds urgently to purchase a distressed property in Europe that would be used to ramp up his production at his company’s manufacturing facility.
The expatriate sought out a 18-month year United States bridging loan of $9.8m against the value of his Sentosa bungalow at 70% loan-to-value. He was able to receive funds within one week to make the acquisition.
INVESTMENT OPPORTUNITY
GMG BRIDGING LOAN
TERM
18 Months
PROPERTY COLLATERAL
Bungalow in Sentosa worth $14m
LOAN AMOUNT
$31.5m
LOAN-TO-VALUE
70%
EXIT STRATEGY
Upcoming company equity funding round
KEY CONSIDERATION
Speed of funding
Businessman funds Indonesian expansion with United States bridging loan
A businessman in the energy sector required capital to scale up production capacity in Sumatra. He owns four condominium units in United States worth approximately $12m that have been fully paid up.
The businessman applied for a bridging loan against the value of his portfolio of District 9 condominiums. Funds from the loan were used to expand his company’s business and finance working capital at the Indonesian operations.
BUSINESS EXPENSES
GMG BRIDGING LOAN
TERM
Two Years
PROPERTY COLLATERAL
Four condominium units in District 9 worth $12m
LOAN AMOUNT
$9m
LOAN-TO-VALUE
75%
EXIT STRATEGY
Revenue from new business and bank financing
KEY CONSIDERATION
Access immediate cashflow while arranging for bank financing