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Give Us a Call 24/7 to Speak to a Loan Specialist: (866) 526-0238

Bridge Loans

A bridge loan used for business purposes is a temporary financing facility that provides short-term funding until a permanent is in place, or until a commercial debt obligation is removed. Bridge loans range between 1-12 months with either a single repayment often (but not always) provided at the end of the term, or a serious of daily, weekly or monthly payments. Rates for this type of financing are usually in the 8-20% range, but can be much higher depending on the type of bridge loan, or bridge funding facility. Bridge financing is typically used for working capital purposes, operating capital while waiting for permanent SBA financing, debt repayment, purchasing of commercial real estate and/or development of commercial real estate, but may have more specific purposes like paying a vendor, making company payroll, making a tax lien payment or completely paying-off a tax lien, accounts payable needs, purchasing inventory, or waiting to clear a purchase order. A bridge loan usually funds faster than more traditional financing — which makes it appealing to businesses that are waiting for more traditional financing to come available. But with speed in funding comes increased risk for the lender, therefore bridge financing is generally much more expensive than more traditional types of business term loans and lines of credit.

There are a number of types of bridge business lending available to small and mid-sized companies, ranging from real estate bridge lending to working capital bridge lending. Bridge financing is offered by traditional banks, small banks, community banks and credit unions, and also by alternative and nontraditional lenders offering mid prime loans, merchant cash advances, factoring, asset based lenders and invoice finance.

  • Interest Rates: 8-20%
  • Terms: 1-12 months
  • Funding amounts: $5,000 – $10,000,000
  • Time to fund: 3-10 days
  • Repayments: Single balloon payment, monthly, daily & weekly
  • Collateral required: Usually
  • Time in Business: 6 months or more
  • Existing loans OK: Yes
  • Tax Liens Acceptable: Varies
  • Industries Funded: All
  • May require appraisals

Approval Rates

Hard Money Lenders75%
Alternative Lenders70%
Cash Advance Lenders90%
Factoring80%

Pros

  • Fast approval and funding
  • Can be secured with real estate
  • Make timely payments
  • May be interest-only
  • Minimal credit requirements with sufficient collateral
  • Provides cash flow while you work on permanent financing

Cons

  • Higher-rates
  • Shorter terms
  • Higher fees than traditional financing
  • Restricted uses
  • Usually requires collateral
  • May require lien searches on collateral

Get a Bridge Loan

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