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Different from most other lenders, Iron Bridge only calculates interest on disbursed construction funds.  Unutilized construction balances remain untouched by interest until drawn upon, which can save Iron Bridge’s borrowers thousands.

 

Iron Bridge Lending is uniquely positioned to provide this service to its borrowers because the company is a $75 million portfolio lender that originates, funds and services its loans from origination through payoff.

By effectively managing the servicing side of the loan, Iron Bridge earmarks these funds internally and keeps capital in-house until disbursement.  This means no carrying cost is passed along to Iron Bridge borrowers.

Compare the Interest Expense Savings of the Iron Bridge Lending Construction Loan program:

Construction Loan Comparison, larger deal

The chart above compares a larger value-add construction loan from Iron Bridge with the same loan from another lender who charges interest on the full amount of the construction loan from Day 1. In this example we assume the following:

  • Principal:  $750,000 ($450,000 acquisition + $300,000 construction funds)
  • Interest Rate:  12%
  • Maturity:  9 months

= $13,500 potential savings with Iron Bridge Lending, or 2.4% APR.

Construction Loan Comparison, smaller deal

The chart above compares a relatively small fix & flip construction loan from Iron Bridge with the same loan from another lender who charges interest on the full amount of the construction loan from Day 1.  In this example we assume the following:

  • Principal:  $150,000  ($100,000 acquisition + $50,000 construction funds)
  • Interest Rate:  12% 
  • Maturity:  6 months

 = $1,000 potential savings with Iron Bridge Lending, or 1.33% APR.

Also– No junk fees!

Absent from the analysis above are the additional junk fees charged by most other lenders.  These junk fees can include document preparation fees, legal fees, and appraisal fees.  Iron Bridge only charges interest rate and points, providing borrowers with additional savings.

 

When these financing costs are considered, the benefit of using Iron Bridge is even greater.

 

Contact Iron Bridge Lending soon to see how much you could save on your next Hard Money Rehab, Fix & Flip or New Construction Loan!

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About the author: Gerard Stascausky, Managing Director (NMLS ID: 854033), co-founder of Iron Bridge Management Group, has been investing in the real estate foreclosure and pre-foreclosure market since 2004. Prior to launching Iron Bridge Lending, he ran Bridgeport Home Solutions LLC, which specialized in the research, acquisition, and management of foreclosure and pre-foreclosure properties in the Portland metro market.
Mr. Stascausky brings to Iron Bridge Management Group over 15 years of investment banking experience. In 1993, he joined Sutter Securities as an investment banking analyst, structuring municipal debt offerings. In 1996, he left to join the equity research department at Montgomery Securities, where he conducted securities research on the payment processing and networking equipment industries. With his background in technology research, he joined Credit Suisse in 1999 as one of the industry’s first Technology Specialist Equity Salesmen. Finally, in 2003, he was recruited to join Pacific Crest Securities, where he served as a senior equity salesman, research product manager and member of the management team.
Mr. Stascausky graduated with honors from the University of California, Davis in 1993. He earned a B.A. in Economics and minors in Psychology and Political Science. In 1996, he earned his Chartered Financial Analyst designation from the CFA Institute.

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