Bridge Loans

What Is a Bridge Loan?

A bridge loan is a temporary loan, usually secured by real estate or other strong collateral, that “bridges” the gap between today and a future event—such as selling a property, securing permanent financing, or receiving a large payout. Terms are typically short (months, not years) and designed around the specific transaction.

When Do Businesses Use Bridge Loans?

• Buying a property quickly while waiting on a long-term commercial mortgage.
• Covering a down payment or equity requirement for a new acquisition.
• Renovating or stabilizing a property before refinancing into permanent debt.
• Closing a time-sensitive opportunity while another asset is being sold.
• Short-term capital needs tied to a clearly defined exit event.

Typical Deal Profiles

Key Features of Bridge Loans

• Short terms: Often 6–24 months, sometimes with extension options.
• Collateral-based: Heavily focused on the underlying property or asset value.
• Interest-only payments: Many structures are interest-only during the term.
• Flexible underwriting: More emphasis on the deal and exit strategy than on perfect credit.
• Speed: Designed to close faster than many traditional bank loans.

Example Scenarios

Scenario 1 – Investor Securing a Time-Sensitive Purchase

An investor finds an off-market industrial building at a discount but must close in 21 days. A bridge loan provides the purchase funds quickly. After light renovations and signed leases, the investor refinances into a long-term commercial loan and pays off the bridge lender.

Scenario 2 – Business Relocating Headquarters

A growing company is buying a larger building but hasn’t yet sold its current facility. A bridge loan uses equity in the existing property to help fund the new purchase, then is paid down once the old building sells.

Scenario 3 – Maturing Loan Payoff

A property has a balloon payment due soon, but the owner needs more time to refinance or sell. A bridge lender pays off the maturing loan and provides a short runway to execute the new plan.

What Lenders Look At

Bridge lenders are primarily focused on the **asset** and the **exit strategy**. They typically review:

• Type, location, and current value of the collateral property or asset.
• Loan-to-value (LTV) or loan-to-cost (LTC) ratios for the transaction.
• Borrower experience, especially on similar projects or property types.
• Documented exit plan: refinance, sale, or other payoff source.
• Current and projected income from the property (if applicable).

What You May Need to Provide

• Property address, photos, rent roll, and basic financials (if income-producing).
• Purchase contract or payoff statement on existing debt, if applicable.
• Budget and timeline for any planned improvements.
• Personal and/or business financial overview and ownership structure.
• Exit strategy details (refinance terms being sought, broker opinion of value, or sale plan).

How Fast Finance Helps

Fast Finance listens to your specific transaction—timeline, collateral, and exit plan—then connects you with bridge lenders that specialize in that type of deal. You get:

• Indicative terms: estimated rates, fees, and leverage based on your scenario.
• Clear closing checklists so you know what’s needed and when.
• Options that balance speed, cost, and flexibility.

Have a time-sensitive opportunity or balloon payment coming up? Check my bridge loan options