Bridge loans provide temporary financing while longer-term funding is secured. These short-term solutions can help businesses capitalize on time-sensitive opportunities.

How Bridge Loans Work

Bridge loans provide short-term capital (typically 6-24 months) secured by real estate or other assets. Interest rates are higher than conventional loans due to short duration and risk.

Common Uses

Bridge loans fund property acquisitions before permanent financing, business expansion during growth phases, or inventory purchases during peak seasons.

Bridge Loan Qualification

Lenders require strong exit strategy (how you'll repay), valuable collateral, and evidence of ability to secure permanent financing.

Costs and Terms

Bridge loans typically charge 1-3 points upfront plus 10-15% interest. They're designed for quick turnover, not long-term use.

Risks and Considerations

Failure to secure permanent financing can result in foreclosure or bankruptcy. Always have a clear exit strategy before obtaining bridge financing.

Conclusion

Bridge loans serve important purposes when used strategically with clear repayment plans and exit strategies.