Investment Approach

Our Underwriting Process

Although Bridge Loan Financial is primarily a collateral-based lender we undergo the following three-step process to determine if the loan will be approved.


STEP ONE | Preliminary Assessment


Q: Is this a property we would want to own and operate?
Q: Should a foreclosure occur, do we believe the investment capital will be secure?
A: If the answer is “Yes” to both questions, we continue with the underwriting process.

STEP TWO | Due Diligence Assessment


Q: Does the borrower have the resources necessary to make payments and the ability to payoff the loan at maturity?
A: We make this determination by documenting and evaluating the borrower’s assets and liabilities, employment, income, and general financial stability. Loan Payoff may occur through a capital event, the refinance of, or sale of the property.


Q: Has the borrower demonstrated a successful history of timely payments?
A: We evaluate the borrower’s history of fulfilling payment obligations, in part by ordering and reviewing the borrower’s credit report.


Q: If the borrower fails to make the payments or otherwise defaults, are we protected?
A: We perform an evaluation of current market value to determine we have a margin of protective equity in excess of the loan amount. This process may include: (1) ordering a new appraisal, (2) obtaining one or more broker price opinions, and (3) conducting a physical site inspection.


Q: Is there a legal entanglement?
A: We require a legal review of the borrowing entity, and the loan documents’ structure and content to ensure there is a clear path to protecting investor’s principal and interest.

If the borrower has met the underwriting parameters outlined above, we proceed with the final evaluation.

STEP THREE | Final Evaluation

The appropriate loan amount is determined. Bridge Loan Financial targets an average LTV of 55% for the portfolio with a maximum LTV of 70% for each individual loan.

We must have a degree of confidence that in the event of foreclosure the securing property can be sold at a net price sufficient to pay off: (1) investors’ capital; (2) outstanding interest and fees owed under the loan terms; and (3) the estimated costs to foreclose, manage, and market the property.