Business Capital
Bridge Capital
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What is Bridge Capital?
Bridge capital is short-term financing designed to "bridge" the gap between immediate funding needs and longer-term financing solutions. It provides quick access to capital when you need it most, typically for 6-24 months.
Bridge loans are ideal for businesses that need immediate funding but are waiting for permanent financing, asset sales, or other funding sources to become available. They offer flexibility and speed when traditional financing isn't an option.
Key Benefits
Common Uses for Bridge Capital
Real Estate Transactions
Bridge the gap between property purchase and permanent financing or sale
Business Acquisitions
Fund acquisitions while waiting for permanent financing or additional funding
Cash Flow Gaps
Cover temporary cash flow shortages while waiting for receivables
Growth Opportunities
Seize time-sensitive opportunities while securing long-term funding
Refinancing
Bridge to better terms while current financing is being restructured
Emergency Funding
Address urgent financial needs while arranging permanent solutions
How Bridge Capital Works
1. Identify Need
Determine your short-term funding need and timeline for permanent financing.
2. Apply for Bridge Loan
Apply with a bridge lender, providing details about your exit strategy.
3. Receive Funding
Get quick funding, typically within 1-2 weeks of application approval.
4. Execute Exit Strategy
Use the time to secure permanent financing, sell assets, or complete transactions.
5. Repay Bridge Loan
Repay the bridge loan with proceeds from your exit strategy.
Typical Terms
Types of Bridge Capital
Real Estate Bridge Loans
Short-term financing for commercial and investment real estate transactions
Acquisition Bridge Loans
Funding for business acquisitions while securing permanent financing
Working Capital Bridge
Short-term funding for operational needs and cash flow management
Refinancing Bridge
Temporary financing while restructuring existing debt
Emergency Bridge Loans
Quick funding for urgent business needs and opportunities
Growth Bridge Loans
Funding for expansion while securing long-term capital
Bridge Capital Requirements
Bridge capital requirements focus on your exit strategy and ability to repay the loan. Lenders want to see a clear plan for how you'll repay the bridge loan, whether through permanent financing, asset sales, or other funding sources.
While credit requirements may be more flexible than traditional loans, bridge lenders need confidence in your ability to execute your exit strategy and repay the loan within the specified timeframe.
Key Requirements
Exit Strategy
Clear plan for repaying the bridge loan
Collateral
Assets to secure the bridge loan
Timeline
Realistic timeframe for exit strategy
Experience
Track record of successful execution
Frequently Asked Questions
Bridge capital is best when you need funding quickly and have a clear exit strategy a specific way you'll repay the loan within 6–24 months (such as permanent financing coming, a property sale, or a business milestone). It's not suited for long-term capital needs. Common scenarios: buying a property before your current one sells, funding an acquisition while arranging permanent financing, or covering a cash flow gap while waiting on a large contract payment.
An exit strategy is your plan for how you'll repay the bridge loan. Bridge lenders underwrite primarily based on your exit strategy because bridge loans are short-term by design. Examples: 'We'll repay when we close permanent financing in 6 months,' or 'We'll repay from the sale of our existing property.' Without a credible exit, lenders can't assess repayment risk.
Bridge loans typically range from 8–18% interest, depending on the lender, loan amount, collateral, and your credit profile. Most are structured as interest-only during the bridge period, which keeps monthly payments manageable. You repay the principal in a lump sum at maturity (the balloon payment). The higher rates reflect the short-term, higher-risk nature of bridge financing.
Bridge loans are typically faster than permanent financing most lenders can fund in 1–3 weeks. Hard money bridge lenders focused on real estate can sometimes fund in as little as 5–7 business days. The speed is part of the value proposition bridge capital is designed for time-sensitive situations.
Bridge loans are almost always secured. Common collateral includes commercial or investment real estate (most common), business assets, equipment, accounts receivable, or other hard assets. The collateral gives the lender a way to recover the loan if the exit strategy doesn't materialize as planned. Loan-to-value ratios are typically 65–75% of the collateral's value.
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