Frequently Asked Questions

1. WHAT IS THE DIFFERENCE BETWEEN A HARD MONEY LOAN, A BRIDGE LOAN, AND A PRIVATE LOAN?

The terms "bridge loan," "hard money loan," and "private loan" can be confusing as they are often used together or interchangeably.  

Bridge loans and hard money loans have similar lending criteria and cost to borrowers. Interest rates are higher than those offered for longer term loans.  Both of which however focus more on the underlying real estate asset as opposed to the borrower.  These loans are also classified as asset-based loans.

A bridge loan is a short term loan used when additional capital is required to stabilize an asset before cash flow or an exit strategy is achieved. For example, if you wish to purchase a distressed property that must be rehabilitated before you are able to rent it out and generate cash flow, you might seek bridge financing which would "bridge" the financing needs between purchase and rehabilitation and stabilization, at which time you could seek conventional, long term refinance options.

Bridge financing has historically been available from conventional lenders, but conventional sources' credit restrictions have tightened considerably in recent years. As a result, many borrowers who might have sought conventional bridge loans in the past now seek hard money loans.

A hard money lender uses private capital to make loans. Since the funds come from private investors rather than deposit institutions, the credit requirements for hard money loans are not as restrictive as loans issued by banks and institutional lenders. Typically a hard money loan is asset based and the borrower may have a number of circumstances which prevent access to a conventional source of financing.

2. WHERE DO YOU LEND?

Continuum Capital Funding (CCF) funds loans on properties only within the greater Chicago metropolitan region.

3. WHAT PROPERTY TYPES QUALIFY FOR CONTINUUM CAPITAL FINANCING?

We provide hard money and rehab loans for rental housing (multifamily, 2-4 units, and SFHs) and mixed-use properties.

4. DO YOU HAVE PRE-PAYMENT PENALTIES?

We typically collect a minimum interest period at the time of the initial advance.

5. WHAT ARE YOUR LENDING LIMITS?

$50,000 to $3,000,000.

6. WILL YOU FINANCE MY CLOSING COSTS OR CAN CLOSING COSTS BE INCORPORATED INTO THE LOAN?

Yes.

7. WILL CONTINUUM CAPITAL FUNDING LEND IN SECOND POSITION?

No, CCF only lends in first-lien position.

8. DO YOU OFFER 100% FINANCING OR AM I REQUIRED TO CONTRIBUTE CAPITAL?

Borrower must contribute capital or pledged collateral with equity.

9. IS THERE A MINIMUM BORROWER FICO CREDIT SCORE REQUIREMENT?

No.

10. DO YOU MAKE OWNER-OCCUPIED RESIDENTIAL LOANS?

No, CCF only lends on non-owner occupied properties. 

11. HOW LONG DOES IT TAKE TO CLOSE A CCF LOAN?

CCF has closed loans in as few as 2 days for qualified, prepared borrowers.

12. DO YOU WORK WITH BROKERS?

Yes.

13. WHAT INTEREST RATES DO YOU OFFER?

11.99 – 17.99% (interest-only).

14. DO I PAY INTEREST ON THE UNUSED REHAB FUNDS?

No.

15. IS CONTINUUM CAPITAL FUNDING A HARD MONEY OR EQUITY BASED LENDER?

CCF makes hard money and bridge loans backed by private equity.

16. WHAT IS YOUR MAXIMUM LOAN-TO-VALUE?

75%.

17. HOW DO YOU DETERMINE THE PROPERTY VALUE?

CCF typically values properties itself.  However, appraisals and broker’s opinions are frequently used.

18. ARE YOU A DIRECT LENDER OR DO YOU JUST BROKER TO INVESTORS?

Yes.  CCF is a direct lender backed by investor funds. 

19. CAN I HOLD TITLE AS PART OF A TRUST, LLC OR CORPORATION?

Yes, but CCF requires a personal guarantee from all title holders in order to lend on a property owned jointly.

20. DO YOU LEND ON PROPERTIES WITHOUT CASH FLOW?

CCF will lend on properties without cash flow but only if there is a strong likelihood of cash flow in the very near future and significant equity exists as-is.

21. WHAT LOAN TERMS DO YOU OFFER?

1 – 2 years, interest-only loans.