The short answer: A bridge loan is short-term financing — usually 6 to 36 months — that "bridges" a gap until permanent financing or a sale. Investors and business owners use them to buy a property fast, reposition a value-add deal, or close before selling another property. They're typically interest-only, priced higher than a permanent loan, and underwritten more on the property and the exit strategy than on lengthy income documentation. The key to a bridge loan is a clear, realistic plan to pay it off.
Bridge loans solve timing problems that conventional financing can't move fast enough for. Here's how they work, what they cost, and when they make sense. To talk through a scenario, reach out or apply now.
How a bridge loan works
A bridge loan gives you capital now, with the understanding that you'll repay it soon from a defined source — the "exit." Because it's short-term and speed-focused, the lender leans on the property's value and your plan rather than pages of tax returns. You usually pay interest only during the term, then repay the principal when you refinance into permanent financing or sell.
When to use one
- Buy before you sell — close on a new property before your current one sells.
- Value-add / reposition — acquire and improve a property that doesn't yet qualify for permanent financing, then refinance once it's stabilized (great for multifamily and fix-and-flip deals).
- Move fast on a deal — win a competitive purchase that needs a quick close.
- Refinance a maturing loan — buy time when a balloon comes due before you're ready.
Rates, terms, and costs
Expect interest-only payments, a term of 6–36 months, and pricing above a permanent loan, plus points and standard closing costs — the premium you pay for speed and flexibility. Leverage is based on the property's value (and sometimes its after-repair or stabilized value). Because the loan is short, the total interest cost can still be modest if your exit happens on schedule — which is why the exit plan matters so much.
Bridge loan vs. hard money
The terms overlap and are sometimes used interchangeably. In practice, hard money usually refers to asset-based, private-lender financing common in investor and rehab deals, while bridge describes the purpose — transitional financing to a defined exit. Many bridge loans are funded by hard money or private lenders. What matters is matching the structure to your timeline and exit.
How Market Capital Lending helps
We arrange bridge and short-term financing through a network of 40–50 lenders, with 40+ years of experience and $375M+ funded — and speed is the whole point, so we prioritize lenders who can commit and close quickly. Explore bridge loans, see how they pair with commercial real estate deals, or start your application. (Rates, approval, and terms vary by credit, collateral, loan amount, and underwriting.)
Frequently asked questions
How long is a typical bridge loan?
Usually 6 to 36 months. It's meant to be short-term, repaid when you refinance into permanent financing or sell the property.
Are bridge loans interest-only?
Often, yes. Many bridge loans are structured interest-only during the term, with the principal repaid at the exit.
Are bridge loans more expensive than regular loans?
Generally yes — they're priced above permanent financing, plus points, reflecting the speed and short term. If your exit happens on schedule, the total cost can still be reasonable.
What is an exit strategy on a bridge loan?
It's how you'll pay off the loan — typically refinancing into a permanent loan or selling the property. Lenders want to see a clear, realistic exit before funding.
Can I use a bridge loan for a value-add property?
Yes — that's a classic use. Acquire and improve a property that doesn't qualify for permanent financing yet, then refinance once it's stabilized.