Short-Term Financing
Bridge Loans Explained: Meaning, Rates, Examples, And Uses
A bridge loan (also called a bridging loan) is short-term financing used to cover a timing gap between a cash need and a permanent funding event.
They are widely used in real estate, business acquisitions, franchise expansions, and commercial property purchases where speed matters more than long-term pricing.
Financely advises borrowers on structuring bridge facilities and placing them with private credit and institutional lenders.
Meaning Of Bridging Loan
The meaning of a bridging loan is simple: temporary capital that “bridges” a borrower from today’s need to tomorrow’s permanent financing or asset sale.
Typical exit strategies include:
- Sale of an existing property
- Refinance into permanent debt
- Business cash flow stabilization
- Equity injection
What Is A Bridge Loan In Real Estate?
In real estate, a bridge loan allows a buyer to acquire property before selling another asset or before long-term financing is available.
Common searches include real estate bridging loan, bridge loans real estate, mortgage bridging loan, and bridge loan mortgage. All describe short-term, asset-backed loans secured by property.
Residential Bridge Loan
Used when purchasing a new home before selling the existing one. Often called residential bridging loan or house bridging loan.
Commercial Real Estate Bridge Loan
Used for multifamily, office, retail, industrial, or mixed-use assets requiring fast execution.
Commercial Bridge Loan Use Cases
- Value-add acquisitions
- Lease-up transitions
- Construction takeouts
- Distressed acquisitions
Financely also arranges bridge financing tied to business acquisition loans
and transactions requiring all-asset lien packages.
Business Bridge Loan And Startup Bridge Loan
A business bridge loan is short-term capital used to support acquisitions, working capital spikes, or delayed receivables.
A startup bridge loan typically bridges to a priced equity round or institutional debt facility.
Bridge Loan Example
A buyer acquires a USD 5M multifamily property.
- Bridge loan: USD 3.5M
- Term: 12 months
- Interest: 11% annualized
- Exit: Refinance into permanent debt after renovations
Bridge Loan Rates Today
Bridge loan rates today typically range from:
- 9% to 13% annual interest
- 1% to 3% origination fee
- 6 to 24 month terms
Hard money bridge loans usually price higher than bank or institutional bridge facilities.
Who Uses Bridge Loans?
- Real estate investors
- Commercial property buyers
- Business acquirers
- Franchise expansion groups
Searches such as bridge loans for franchise expansions and bridge loans for franchise expansion strategies fall into this category.
Why Banks Decline Many Bridge Loan Requests
- No clear exit strategy
- Weak collateral
- Poor documentation
- Unrealistic valuation assumptions
Financely prepares lender-grade packages aligned with underwriting memo standards
to reduce execution risk.
Where Financely Fits
Financely operates as a transaction-led debt placement advisory.
We structure and place bridge facilities across residential, commercial real estate, and business acquisition transactions.
Learn more about our platform: What We Do.
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FAQ
What is a short term bridge loan?
A loan with a maturity of 6 to 24 months designed to bridge to permanent financing.
Are bridge loans expensive?
They cost more than permanent debt but offer speed and flexibility.
Do you guarantee approvals?
No. Lenders decide. Financely structures and routes transactions.
Minimum deal size?
Typically USD 2.5M and above.
Important:
This content is for informational purposes only. Financely is not a lender and does not guarantee financing outcomes.