First of all, the company's loans are secured and short-term in nature. Usually, real-estate is used as security against the loans, and all payments are due within a year. Throughout every quarter of this downturn, business has (somewhat surprisingly) appeared to run smoothly, with full and timely collections resulting in a growing loan asset pool.
Manhattan Bridge's capital structure is very safe as well, as the company carries minimal debt relative to its loan portfolio. Furthermore, the stock trades for half of its net current assets (with the loan portfolio classified as current due to the short-term nature of the loans).
There are some other interesting items with respect to this stock as well. It is a ridiculously small company, even by the standards of this site! The company's market cap is just over $3 million, and the company had but 3 employees as of its last annual report. Also, as the company's share price has hovered below $1 for extended periods, it has received warnings from the Nasdaq, but so far it has remained compliant with the exchange's requirements.
Whether the company's bridge loans will continue to perform is an open question. However, the market appears to be counting on the fact that half of these loans will fail, offering value investors a margin of safety with potential for price appreciation. In many ways, this company's price/value situation is very similar to that of Quest Capital, another potential value investment previously discussed on this site.
Disclosure: Author has a long position in shares of LOAN