What Is A Bridge Loan? #
A bridge loan is short-term financing that provides immediate capital to investors while they arrange for permanent funding or prepare to sell an asset. It bridges the gap between today’s opportunity and tomorrow’s long-term solution.
Because this loan is secured by the real estate itself, approval leans more on current value, exit strategy, and sponsor experience than on W‑2s or tax returns.
Key Features of a Bridge Loan #
Bridge loans typically run six to eighteen months; they are interest-only, which helps reduce monthly payments; they are asset-based, meaning lenders focus on property value and business plan rather than W-2 income; they close quickly, often in ten to twenty-one days; and they are flexible, allowing proceeds for acquisitions, refinances, or cash-outs.
Why Investors Use Bridge Loans #
Investors rely on bridge loans when timing is critical. They work well for purchasing a new property before another sells, for acquiring an asset that banks will not finance yet, or for covering short-term expenses during a renovation or repositioning. In fast-moving markets, the ability to close quickly often means winning a deal instead of losing it.