Bridge Loan

A bridge loan is short-term commercial financing — usually one to three years, often floating-rate and interest-only — that carries a property through a transition the permanent market won’t underwrite: an acquisition that must close fast, a renovation, a lease-up, or an expiring loan that needs breathing room. Bridge lenders underwrite to the plan and the as-stabilized numbers rather than to in-place income, and they price for it, typically several hundred basis points above bank permanent rates plus origination and exit fees.

For borrowers the discipline is the exit. A bridge loan is only as good as the permanent refinance it bridges to, so the underwriting question to ask yourself is not "can I get the bridge?" but "will the stabilized property support takeout debt at conservative assumptions?" Extension options — and the tests attached to them — are the safety valve worth negotiating hard for.

Bridge activity shows up in our county-record data (bridge deeds of trust record like any other) and in observed terms where lenders have quoted transitional programs.