be charged. Loan-to-value (LTV) ratios generally do not exceed 65% for commercial properties, or 80% for residential properties, based on appraised value. A bridge loan may be closed, meaning it is available for a predetermined time frame, or open in that there is no fixed payoff date (although there may be a required payoff after a certain time). A first charge bridging loan is generally available at a higher LTV than a second charge bridging loan due to the lower level of risk involved, many UK lenders will steer clear of second charge lending altogether. Lower LTVs may also attract lower rates, again representing the lower level of underwriting risk, although front-end fees, lenders legal fees, and valuation payments may remain fixed. Examples A bridge loan is often obtained by developers to carry a project while permit approval is sought. Because there is no guarantee the project will happen, the loan might be at a high-interest rate and from a specialized lending source that will accept the risk. Once the project is fully entitled, it becomes eligible for loans from more conventional sources that are at a lower interest, for a longer term, and in a greater amount. A construction loan would then be obtained to take out the bridge loan and fund the completion of the project. A consumer is purchasing a new residence and plans to make a down payment with the proceeds from the sale of a currently owned home. The currently owned home will not close until after the close of the new residence. A bridge loan allows the buyer to take equity out of the current home and use it as a down payment on the new residence, with the expectation that the current home will close within a short time frame and the bridge loan will be repaid. A bridging loan can be used by a business to ensure continued smooth operation during a time when for example one senior partner wishes to leave whilst another wishes to continue the business. The bridging loan could be made based on the value of the company premises allowing funds to be raised via other sources for example a management buy in. A property may be offered at a discount if the purchaser can complete quickly with the discount offsetting the costs of the short term bridging loan used to complete. In auction property purchases where the