Bridge Loan
A bridge loan is short-term interim financing intended to "bridge" the borrower between an immediate capital need and a future takeout event (such as longer-term financing or an asset sale). In real estate contexts, bridge loans are commonly associated with transitional situations where the asset is expected to improve or stabilize before takeout.
- Where it applies
- Generally, not specific to New York
- When it comes up
- Acquisition; transitional business plan execution; refinance/takeout
- Property types
- Commercial; multifamily; sometimes residential
In practice
Bridge underwriting often pivots from "in-place DSCR" to "path-to-stabilization + takeout feasibility," so the central diligence object becomes the business plan and the takeout constraints.
Read more in the Knowledge Base
Related terms
takeout financingtransitional assetstabilizationinterest-only (common feature)exit strategy
Commercial Lending
- Acceleration Clause
- Credit Facility
- Debt Service Coverage Ratio (DSCR)
- Net Operating Income (NOI)
- Pari Passu Loan
- SBA 504 Loan Program
General information, not legal, tax or financial advice.