Bridge-to-Perm Loans

For your un-stabilized property, A10’s bridge loans provide future funding facilities for TI/LC and Cap-Ex costs with terms up to 7 years to allow you time to execute your business plan.

Our custom-designed loans enable you to choose between the fixed, floating, or hybrid (fixed-to-float) rate structures that best suit your needs. We are the only bridge lender that offers fixed-rate solutions for bridge loans, which eliminates your interest rate risk.

• Only lender to offer fixed-rate solutions for bridge loans
• No make-whole premium or breakage on fixed-rate loans
• Fixed rates eliminate cost of hedging against inflation and higher interest rates

Our bridge loan matches your business plan — not our needs. We offer terms of three to five years, with extensions up to seven years, so you’ll have enough time to lease up your un-stabilized properties. An A10 bridge loan is significantly less risky than a 364-day line of credit or short-term bullet maturity, both of which can be challenging to refinance during times of market volatility. We want to see you succeed by giving you the appropriate runway.

• 3-5 year loan terms plus extensions
• Longer-term bridge loan protects against market shutdown
• Gives you time to make improvements to optimize your sale or become eligible for permanent financing

Banks and permanent lenders such as insurance companies and CMBS lenders typically finance stabilized properties and require a debt service coverage ratio (DSCR) of at least 1.25x. Even most bridge lenders target nearly stabilized properties — those with occupancies greater than 65 percent — and require DSCR hurdles greater than 1.0x due to requirements of their warehouse facility.

We know, however, that an un-stabilized property’s value can be unlocked with capital in the hands of an experienced real estate operator. We can finance properties with initial occupancy rates of less than 65 percent and DSCRs below 1.0x.

• No occupancy requirements
• A10 requires a DSCR of less than 1.0x
• Offer greater flexibility than banks and permanent lenders

We can structure higher-leverage loans by stretching LTV up to 80 percent for quality properties in strong markets. A Stretch LTV can reduce the amount of capital you need for your project, and is especially helpful for the following:

- Clients who want to finance a discounted payoff and wish to minimize the new equity requirement
- Maturing loan refinances on properties with an equity gap
- Local, experienced real estate operators who may have limited access to equity capital
- Sponsors of high-quality properties in strong markets with compelling business plans who want to enhance their returns through higher leverage

• Stretch LTV up to 80 percent
• Reduce your need for upfront capital
• Increase your returns through higher leverage

A10 doesn’t use lock-out provisions that prohibit loan prepayment. You’ll have the flexibility you need to sell your property at the most opportune time. Our loans are not structured as lines of credit, so we require only reasonable minimum interest periods that are aligned with your business plan.

• No lock-out provisions
• Maximum flexibility
• Reasonable minimum interest periods

Our 20 year fully amortizing loan terms let you lock in your long-term payments while interest rates are at historic lows, so you won’t need to take on additional risk of refinancing once your loan matures. You won’t need to gamble on where rates will be in 10 years, or if the credit markets will be open or shut. You’ll also be able to plan your legacy by preventing future generations from using irresponsible leverage.

• Up to 20 year loan terms
• Lock in your interest rate
• Eliminate refinance risk of typical 10-year maturities
• Valuable long-term planning tool

Volatile markets and Fed rate hikes are not a concern with A10’s early rate lock capabilities. A10 Capital’s early rate locks give you the ability to lock in historic lows in interest rates within five business days of application. Early rate locks can provide significant savings during rising rate or volatile spread environments.

Enjoy the certainty of closing at a firm rate and stay away from the game of CMBS re-trading.

• Rate lock at application
• Spread lock manages volatility
• Index lock takes advantage of low rates

Do you ever feel like third-party CMBS servicers won’t answer the phone without collecting a fee? According to CREFC, many CMBS servicers charge a range of fees for services, such as paying taxes or obtaining lease approvals. Not A10. Since we service your loan in-house, we are focused on creating a better experience for you so you can successfully execute your business plan over the life of the loan.

Fees aside, most borrowers are frustrated by lack of or delay in response to requests to CMBS servicers. A request for a SNDA, for example, can take months to get a response or approval, time you don’t have in your day-to-day operations. That SNDA is just not a high priority to a third-party servicer who is trying to keep costs down and maximize profits. As a full service platform, we handle these post-closing requests in-house.

Many conduit lenders delay loan closing until either a B-Piece buyer approves the loan or until days before the loan is actually sold off. For a borrower, this creates delays and uncertainty. Not at A10. You are never re-traded because a B-Piece buyer did not like your loan. And you are not kept waiting on the side lines until your loan can be closed simultaneously with it being sold off.

• No B-Piece buyer
• No delayed closing to match loan sale

Other lenders — especially CMBS lenders — often outsource underwriting to third parties that might be disinterested at best and unresponsive at worst. All of A10’s full-service underwriting is completed in house, giving you the speed and certainty you need to close quickly. Don’t run the risk of working with a conduit lender who won’t engage an underwriter until after your term sheet has been signed.

• In-house underwriting team
• Complete your transaction quickly
• Your underwriting will never be outsourced to a third party

Other lenders — especially CMBS and LifeCo lenders — outsource legal due diligence, closing, and loan documentation to expensive law firms who are loyal to the lender, not to you. To add insult to injury, many of those law firms are located in financial centers and are staffed by partners with hourly bill rates of $500-$1,000. A10 has an in-house legal team that will give you a seamless experience at a fraction of the cost.

We are able to save you time and additional legal costs because our opinion letter requirements are simplified and straightforward. Negotiating complex opinion letters slows down the closing process and is an open invitation for lawyers to run up even larger bills.

In addition, saving $50,000 to $100,000 on a middle-market loan significantly lowers your effective cost of borrowing.

• In-house legal team
• Faster closing process without requirement of cumbersome borrower opinion letters
• Typically saves you $50,000 to $100,000 in legal costs

Most LifeCos won’t underwrite loans worth less than $10 million, and those that do often require full personal guarantees and/or lower leverage. Our middle-market focus and entrepreneurial culture give us the speed and flexibility we need to close quickly — no outsized guarantees necessary.

• Flexibility to work with smaller loans
• No personal guarantees required
• Rapid closing

Borrowers need the flexibility to meet their business plan without costly and complex defeasance. A10 works with you to find the structure that fits your business plan and, above all, refuses to put our clients through the hurdles of defeasance.

• No defeasance
• More flexible than CMBS lenders
• Avoids the daunting effort and endless stream of paperwork associated with defeasance

A property with an assumable loan from A10 is an easier property to sell, when the time comes. Imagine if, when you’re ready to sell, interest rates are 2-4% higher than what you are paying. This will help enhance the marketability of your property to potential buyers, translating into higher sales proceeds for you. You also avoid pre-payment costs by having a qualified buyer assume A10’s permanent mortgage.