What a Bridge Loan Actually Does
A bridge loan is short-term debt — typically 6 to 24 months — that lets an investor act before permanent financing is in place. It "bridges" two events: an acquisition and a refinance, a sale and a purchase, or a value-add and a stabilization.
Common Investor Use Cases
- Closing fast. Win a deal in 7–14 days when other capital sources can't move.
- Cross-collateral. Use equity from existing properties to fund a new one with little or no cash down.
- Equity pulls. Cash out fast on a stabilized rental to fuel the next acquisition.
- Bridge-to-perm. Acquire a value-add asset, stabilize it, then refi into a 30-year DSCR loan.
- Maturity rescue. Pay off a maturing loan while a permanent refinance is processed.
Terms to Expect
- LTV: typically up to 75%.
- Term: 6–24 months, often with extension options.
- Payments: interest-only to maximize cash flow.
- Close: 7–14 days on clean files.
The Exit Strategy Question
Bridge lenders care about one thing more than anything else: how does this loan get paid off? A clean exit — a sale, a refinance, or a recapitalization — is what makes a bridge loan fundable. No exit, no deal.
When Bridge Is the Wrong Tool
Bridge loans are pricier than long-term debt. For stabilized rentals where speed isn't critical, go straight to DSCR. For heavy renovations, fix & flip terms are usually better suited. Bridge fits the in-between — see how to finance a rehab property for how all three fit together.