bridge financing

A bridge loan serves as a brief financial solution, typically obtained for a duration ranging from 2 weeks to 3 years, contingent on the structure of eventual longer-term mortgage financing. It is characterized by its expedited availability, often utilized in scenarios requiring swift action.

While offering quick access to funds, bridge financing tends to be associated with higher costs, including elevated interest rates and fees, compensating for its short-term nature and rapid availability.

Commonly employed in commercial real estate transactions, bridge loans facilitate the prompt closure of property acquisitions, the purchase of real estate from foreclosure, or the capitalization on short-term opportunities. These loans are usually repaid when the property is sold, refinanced with a traditional lender, or upon the property's enhancement or completion, enabling the transition to permanent mortgage financing.

Bridge financing addresses various needs, including those associated with new construction projects, business expansions, mergers or acquisitions, investment opportunities, land development, and servicing. It is particularly suitable for short-term closing requirements where a rapid influx of capital is imperative.