Commercial Bridge Financing

Bridge financing is designed for speed and flexibility, not long-term cost efficiency. Traditional commercial mortgages offer lower rates but take 3 to 6 weeks to fund and require extensive underwriting. Bridge loans can fund in days, have simpler qualification criteria focused primarily on equity and exit strategy, and carry higher interest rates to compensate for the speed and risk. Bridge loans are meant to be temporary, typically replaced by permanent financing within 6 to 24 months.

Every bridge lender requires a clear exit strategy before funding. Common exit strategies include refinancing with an institutional lender once the property is stabilized, selling the property, or completing construction or renovations that qualify the property for permanent financing. The stronger and more clearly defined your exit strategy, the better the terms you will receive. We help structure exit plans that satisfy lender requirements.

Funding timelines depend on the deal complexity and the lender. Private bridge lenders can fund straightforward deals with clear equity in as little as 48 hours to 5 business days. More complex transactions or larger loan amounts typically take 1 to 3 weeks. The primary factors affecting speed are the quality of documentation provided, property appraisal turnaround, and legal review. We prepare files specifically to accelerate bridge closings.

Bridge financing carries higher costs than traditional mortgages due to the speed and flexibility involved. Interest rates typically range from 7% to 14% depending on the loan-to-value ratio, property type, and duration. Most bridge loans also carry a lender fee of 1% to 3% of the loan amount and legal costs. These costs are offset by the value of the opportunity the bridge financing enables, whether that is preventing a foreclosure, securing a below-market acquisition, or avoiding a missed closing deadline.