What Is a Commercial Bridge Loan?
A commercial bridge loan is a short-term, asset-based loan that "bridges" the gap between buying or holding a commercial property and securing permanent financing. It is secured by commercial real estate, underwritten on the asset's value and the borrower's exit strategy rather than long-term cash flow, and is used for business or investment purposes only. Most bridge loans run up to 24 months.
How Do Commercial Bridge Loans Work?
A bridge loan is sized against the property's value and the strength of the business plan, funds in as little as one to three weeks, and is repaid when the borrower sells the property or refinances into permanent debt. Payments are typically interest-only, keeping carrying costs low while the plan plays out. Because the loan sits in first-lien position, the lender's protection is the equity in the asset, and the exit is what they underwrite most closely.
Commercial Bridge Loan Rates, Points & Fees (2026)
Most commercial bridge loans carry an interest rate between 7% and 12% in 2026, with origination of 1 to 4 points and most lenders charging 2. Bridge lenders also commonly collect a deposit when the term sheet is signed to cover third-party costs such as legal, appraisal or BPO, environmental reports, and a site visit. Pricing depends on the asset class, leverage, sponsor, and the clarity of the exit.
Commercial Bridge Loan Terms & Guidelines
Loan Amounts
Most commercial bridge lenders lend from about $250,000 to $50,000,000, with the largest deals reserved for strong sponsors and liquid asset classes.
Loan-to-Value & Leverage
Bridge LTV commonly reaches up to 75%, and up to 80% loan-to-purchase on value-add deals where the borrower brings 15% or more in cash; cash-out requests are usually held to a lower LTV.
Lien Position & Term
Loans are usually first-lien, occasionally second, with terms up to 24 months and some lenders going longer.
Payments
Interest-only, structured so the loan is repaid by a sale or a refinance at the end of the term.
Commercial Bridge Loan Requirements — Do You Qualify?
Bridge approval depends mainly on the asset and a credible exit, with sponsor experience and liquidity affecting leverage and pricing. Lenders generally look for: a property with a clear value-add or stabilization plan; 15%+ cash on value-add purchases; reserves and liquidity to carry the asset; a realistic takeout — sale or permanent refinance; and a deposit at term-sheet stage for third-party reports. Vacant and low-occupancy properties are considered.
Common Commercial Bridge Loan Scenarios
The most common bridge scenarios are a time-sensitive acquisition, a reverse 1031 exchange, a straight refinance of a maturing loan the borrower can't yet replace conventionally, and an equity cash-out for working capital or renovations — usually at a more conservative LTV than a purchase.
Commercial Bridge vs. Conventional Financing
Choose conventional or permanent financing when the property is stabilized and you want the lowest long-term rate; choose a bridge loan when you need to close fast, the asset is transitional or vacant, or a maturing loan is coming due before you can refinance. A bridge buys time and certainty; permanent debt is the eventual exit.
Pros and Cons of Commercial Bridge Loans
The main advantages of a commercial bridge loan are speed, asset-based approval, and a willingness to lend on vacant, distressed, or transitional property; the main drawbacks are a higher rate than permanent debt, a short term, and the need for a credible exit. A bridge is a tool to reposition or buy time, not a long-term hold.
How to Choose a Commercial Bridge Lender
The best bridge lender for a deal is the one active in your asset class and market whose leverage, timeline, and exit expectations fit your business plan — not just the lowest rate. Bring Capwell the scenario once, and we match it with bridge lenders likely to fund it competitively so you can compare real terms and close on time.
