Commercial Bridge Loans
A bridge loan is short-term financing, usually 12 to 36 months, that covers a property until it qualifies for long-term financing or is sold.
It fits investors acquiring or repositioning properties that do not yet meet permanent loan standards, or who need to close faster than a bank can.
Bridge Loans quick facts
These are the typical terms for bridge loans. Your actual terms depend on underwriting.
| Typical amount | $250,000 to $50,000,000 |
|---|---|
| Typical term | 12 to 36 months, often with extension options |
| Typical funding speed | Typically 2 to 4 weeks after a complete file |
| Typical minimum requirements | Clear exit plan, up to 65% to 80% of cost or value, real estate experience |
| Cost structure | Higher interest rate, often interest-only, plus origination and exit fees |
Bridge Loans: good fit or not?
This option works well for some situations and is a poor match for others.
Good fit
- Value-add acquisitions with a renovation or lease-up plan
- Time-sensitive purchases
- Properties that do not yet meet permanent loan coverage
- Recapitalizing or buying out a partner
Not a good fit
- Stabilized properties that qualify for permanent loans
- Deals without a realistic exit strategy
- Owner-occupied homes
Documents usually needed
Having these ready typically speeds up review. A funder may request additional items.
- Purchase contract and deal summary
- Business plan and renovation budget (if applicable)
- Rent roll and operating statements
- Schedule of real estate owned
- Proof of liquidity for down payment and reserves
- Entity documents
Bridge Loans: how it works
The process typically follows 4 steps from first conversation to funding.
Share the plan
Send the property, purchase price, budget, and exit strategy.
Receive terms
We present term sheets with leverage, rate, fees, and term.
Due diligence
The funder orders valuation and reviews the property and sponsor.
Close and execute
Fund the loan, then execute your plan and refinance or sell.
Bridge Loans vs. Commercial Property Loan
The main difference comes down to structure, cost, and timing. Here is how they typically compare.
| Feature | Bridge Loans | Commercial Property Loan |
|---|---|---|
| Purpose | Transition, repositioning, speed | Long-term hold |
| Typical term | 12 to 36 months | 5 to 25 years |
| Payments | Often interest-only | Usually amortizing |
| Typical speed | 2 to 4 weeks | 30 to 60 days |
Typical characteristics. Terms vary by funder and file.
Bridge Loans FAQs
What is an exit strategy?
An exit strategy is how you plan to repay the bridge loan, usually by refinancing into a permanent loan or selling the property. Funders review it closely.
Can a bridge loan include renovation funds?
Many bridge loans include a construction or capital improvement holdback that is released in draws as work is completed.
Are bridge loans interest-only?
Most are, which keeps payments lower during the transition period. Some funders may require partial amortization.
What happens if my project takes longer than expected?
Many bridge loans offer extension options for a fee if certain conditions are met. Review extension terms before closing.
Do bridge loans require good credit?
Credit matters, but bridge funders typically focus more on the property, the plan, and your experience and liquidity.