Bridge Loan

Short-term financing that bridges the gap between acquiring a property and arranging permanent financing.

A bridge loan provides immediate capital to close on a property while longer-term financing is arranged. Common uses include buying a new property before selling an existing one, or stabilizing a property before refinancing into a DSCR or conventional loan.

Bridge loans are typically:

6–24 month terms
Interest-only payments
Rates of 8–13% depending on lender and LTV
Faster to close than conventional loans (7–21 days)

Unlike hard money, bridge loans are sometimes offered by institutional lenders and can be larger loan amounts for commercial acquisitions.

Related Terms

DSCR

Debt Service Coverage Ratio — measures a property's income vs. its mortgage payments.

LTV

Loan-to-Value — loan amount as a percentage of the property's appraised value.

Hard Money Loan

Short-term, asset-based financing used by investors for acquisitions or rehab — typically 6–24 months.