Commercial Bridge Loans

Commercial bridge loans are short-term financing solutions commonly used in the real estate industry to cover temporary funding gaps during property purchases or renovations. Popular among house flippers, developers, and investors, these loans help facilitate fast acquisitions or improvements before long-term financing is secured, or a property is sold.

Often referred to as "gap financing" or "swing loans," bridge loans are typically secured by the property itself—classifying them as a form of hard money loan. Their speed, flexibility, and asset-backed structure make them an ideal choice for time-sensitive real estate opportunities and transitional financing needs across various industries.

Conventional Bank Loan Highlights

Eligible Properties:	Multifamily, Office, Retail, Warehouse/Industrial, Hospitality, Medical/Healthcare, Self-Storage
Loan amount range:	Minimum $1,000,000
Interest Rate:	Fixed rates vary. Floating Rates from 2.30% over LIBOR. See current LIBOR Rates.
Loan Term:	3 to 15 years
Amortization:	10 to 30 years.
Maximum LTV:	80%
Minimum DSCR:	1.20x
Minimum Debt Yield:	7-8%
Recourse:	Can be non-recourse, limited-recourse or full recourse.
Prepayment:	Can be no prepay penalty, step-down, or flat-rate.

Advantages / disadvantages of Commercial Bridge Loans

Advantages:

Commercial bridge loans offer a range of strategic benefits, especially for real estate investors, developers, and businesses needing fast, flexible financing:

Fast Approval and Funding
Bridge loans are typically underwritten quickly, allowing you to close on properties faster than with traditional financing. This speed can give you a competitive edge in a fast-moving market—making your offer more attractive to sellers.
Flexible Credit Requirements
These loans are asset-based, meaning they focus more on the property’s value than your credit score. As a result, borrowers with limited or poor credit histories still have a path to financing.
Interest-Only Payment Options
Many bridge loans offer interest-only payments during the loan term. This helps flippers and developers manage cash flow while renovating or repositioning the property—deferring full repayment until the property is sold or refinanced.

Disadvantages:

While commercial bridge loans provide essential short-term flexibility, there are a few considerations to keep in mind:

Limited Loan Terms
Bridge loans are intended for short-term use—typically ranging from 6 months to 3 years. Borrowers needing extended repayment periods will need to refinance into a longer-term mortgage.
Higher Interest Rates
Due to the short-term nature and risk profile, interest rates on bridge loans are usually higher than traditional loans. While the higher rate may be manageable over a short term, it can become costly if the project is delayed.
Potentially Higher Fees
Bridge loans may include higher origination or closing fees than long-term financing. It’s important to factor these into your overall project budget to ensure profitability.

At Bravo Mortgage, we help you weigh the pros and cons of commercial bridge loans and structure financing that works for your timeline, goals, and exit strategy. Let’s bridge the gap together—strategically and confidently.

Commercial Bridge Loans FAQ’s

Commercial bridge loans can be applied to almost any type of property and are especially helpful in the following scenarios:

Flipping Properties: Investors often use bridge loans to acquire and renovate properties quickly. These loans provide the upfront capital, and repayment is made in full after the property is sold.
Property Investment Opportunities: When timing matters, bridge loans help investors secure high-demand properties without the delay of traditional underwriting. Once acquired, the financing can be transitioned to a long-term mortgage.
Business Relocation: Companies moving locations can use bridge financing to purchase a new property before selling their existing one, minimizing downtime and risk.
Challenged Credit Situations: Businesses with less-than-perfect credit may still qualify for a bridge loan, since approval focuses more on the asset than credit score.

Because these loans are privately issued and not bound by state or federal mortgage regulations, they come with a degree of flexibility:

Senior Tranches (lower risk): Receive principal and interest payments first.
Junior Tranches (higher risk): Offer higher yields but are last in line for payment and first to absorb any losses.

This structure helps balance risk and return, making CMBS investments appealing to a range of investors, from conservative bondholders to high-yield seekers.

Key Loan Features

Loan Terms: Typically range from 6 months to 3 years
Repayment Options: May be interest-only or balloon payment at term-end
Rate Type: Fixed or variable interest rates available
Loan-to-Value (LTV): Usually between 65% and 80%, with higher LTVs available for value-add or improvement projects
Loan Amounts: Can vary significantly—from under $100,000 to multi-million-dollar transactions

Some of the standout features of bridge loans include:

Short-Term Duration: Ideal for holding properties briefly or securing financing quickly while waiting for a longer-term mortgage.
Property-Based Approval: Underwriting is based primarily on the appraised value of the property, making the process faster and more accessible.
Non-Recourse Option: Many bridge loans are non-recourse, meaning your personal assets are protected if the loan defaults—only the property is at risk.
Interest-Only Payments: To ease cash flow, many bridge loans offer interest-only monthly payments until the loan matures or is refinanced.

At Bravo Mortgage, we help you evaluate whether a bridge loan is the right fit—and structure the terms to align with your business goals. Whether you're seizing an investment opportunity or transitioning to a new location, we provide the speed and strategy to move forward with confidence.

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