As a professional in the field of lending, I often chuckle at those who make application for loans totaling millions of dollars who then argue the smallest of fees.  Many times we are dealing with sponsors or borrowers who have paid brokers large sums of money  to represent them, only to balk at the lenders request for a deposit for third-party fees.

Most of the times this happens with bridge loans.  As an example, our bridge lending client’s provide up to 80% LTC on the purchase price and 100% of the construction costs on loans up to $10,000,000.  However, when it comes time to sign the Proposal of Terms and pay the non-refundable application fee they balk.

When it comes time to determine where a borrower spends their money, it always a good idea to ascertain the intermediaries connection to capital.  In today’s topsy-turvy world of commercial finance, it’s important to realize that almost all loans are sold and that many so-called direct lenders are nothing more than glorified correspondent lenders for larger funds… realizing essentially, that the majority of loans in the world today are sold at the point of funding or very shortly thereafter is the definition of a lending culture where every loan is a brokered loan.

So what does this mean in the world of bridge lending and what does it mean for borrowers and sponsors seeking the all important capital they need to acquire, re-position and stabilize distressed commercial and multifamily residential assets?  It means seeking out the advisors and intermediaries that are most closely connected to the capital that is real and who can get the deal closed!

Taking the advice that ‘up-front’ fees are always bad and not understanding what a real upfront fee can meant he difference between closing a loan and being frustrated in a market place for months and years as one struggles to follow the advise of a poorly connected advisor versus taking the advice of well-connected professionals who understand the bridge lending market, are connected on the inside to underwriters and decision makers and who are trusted in the marketplace.

The point here is simple, when seeking a bridge loan for commercial real estate or multifamily residential assets, understanding that real lenders will charge application fees and deposits for third-party fees is critical to finding success and obtaining that hard sought loan.  Real lenders leverage ethical, experienced and knowledgeable advisors and intermediaries to bring them high value loans and experienced sponsors and borrowers.  Connecting with the right advisor is the key to success.  Remembering that in this economy as in past economies, paying for the cheapest advisor and skimping on small insignificant fees can lead to a never-ending cycle of Term Sheets, LOI’s and Proposals that never go anywhere.  Remember that age-old adage, typically, you get what you pay for…


Dividend America Commercial Lending is an origination, processing and pre-underwriting platform to non-traditional lenders, investors and banks.  We assist our channel funding partner clients by providing specific deal flow into their pipelines, by increasing sponsorship and trade opportunity quality and by lowering bottom line costs typically associated with maintaining and staffing in-house origination and processing departments.  We assist the sponsor/consumer of equity and lending products by providing direct access to entrepreneurial capital seeking to lend on or invest in projects from real estate to business opportunities.  At Dividend America we provide lending solutions, not just loans!

Our clients include:  Investment Banks, Hedge Funds, High Net Worth Family Offices, Traditional and Non-Traditional Banks, Fund Managers, Insurance Conduits. and other entrepreneurial capital providers from Equity, Bridge and Mezzanine to Senior Secured Debt.