How to Get a Commercial Bridge Loan

Bridge debt is not the default choice. It fits when a property cannot support permanent financing today because it is vacant, mid-renovation, recently acquired at a discount, or carrying leases that roll before a bank will underwrite it. The plan has to change the property's income or value within the loan term, typically 12 to 24 months, so the exit can repay the bridge balance. If the numbers work on a conventional loan today, a bridge loan usually costs more than the situation requires.

The other test is timing. A buyer under a tight contract, an owner facing a maturing loan with no time to season stabilized income, or a sponsor who needs to move before a competing bidder closes all have a real use for speed. A bridge lender can often move from term sheet to funding well inside the 60 to 90 days a bank typically needs, because the underwriting leans on the plan and the sponsor as much as on trailing financials.

Every lender reads a request in the same order: the deal, the plan, and the sponsor. Before the first call, write a one-page summary that states the purchase price or payoff amount, the current condition and income, the plan and budget to reach stabilization, and the exit, whether that is a sale, a refinance into permanent debt, or a lease-up that supports agency financing. A lender who understands the exit in the first paragraph moves faster through underwriting.

Pair the summary with a sources and uses table and a preliminary budget, even if the numbers are not final. A lender sizing a bridge loan wants to see how the loan basis, equity, and any earnout or holdback line up against total project cost from day one, not after weeks of back and forth.

Bridge lenders specialize by asset class, loan size, and geography, so a request that fits one lender's box gets ignored by another. Direct lenders who fund from a discretionary balance sheet move faster and negotiate more flexibly than a lender that has to sell the loan or get committee approval up a chain. Match the request to lenders whose stated range actually covers the loan amount.

As an illustration, a sponsor refinancing a $12 million value-add apartment deal with a $9 million bridge request should skip lenders whose typical box tops out at $5 million and go directly to lenders active in the $5 million to $50 million range for that asset class.

A complete request package lets a lender issue an indicative term sheet within days instead of weeks. That package typically includes the purchase or payoff information, a current rent roll and trailing financials, the renovation or business plan and budget, a sponsor bio and schedule of real estate owned, and entity information.

The term sheet that comes back states the loan amount, index and spread, term and extension options, key fees, reserve requirements, recourse, and the conditions the lender needs satisfied to fund. Read it against the deal's actual cash flow and budget before signing, because the fees and diligence deposit that follow the signed term sheet are generally non-refundable.

Signing a term sheet starts the clock on third-party due diligence: an appraisal, a property condition assessment, an environmental report, title and survey work, and often an updated rent roll and lease audit. The lender's underwriting team is testing the numbers in the request package against independent evidence, and any material gap between the request and what the reports show can change the loan amount or trigger a re-trade.

Sponsors who keep diligence moving stay responsive: scheduling site access for inspectors within days, producing requested documents inside 24 to 48 hours, and flagging known issues, like a pending litigation matter or a code violation, before the lender's counsel finds them independently.

Closing brings together the lender's counsel, the borrower's counsel, title, and often a construction or budget monitor if the loan includes future funding. Loan documents get negotiated against the signed term sheet, the closing statement reconciles all fees and prorations, and funds are wired once every condition precedent is satisfied.

Entity documents, insurance certificates naming the lender, and any required opinion letters typically need to be finalized before the lender's counsel will release a closing date, so starting that workstream early avoids being the reason a closing slips.

A bridge loan does not end at funding. Most loans carry reporting requirements, such as monthly or quarterly financials, budget draw requests if the loan includes future funding, and covenants tied to leasing or renovation milestones. Falling behind on reporting, even when the underlying project is on track, can trigger default notices that complicate a later extension or refinance conversation.

Sponsors who track their extension options and covenant tests on a calendar, rather than reacting when a notice arrives, keep more leverage when it comes time to negotiate a rate reset or extension fee with the lender.

The most common mistake is starting outreach without a defined exit. A lender asked how the loan gets repaid needs a specific answer, whether that is a sale at a stated basis, a refinance into agency debt at a projected debt yield, or a payoff from a capital event already in motion. A vague answer slows underwriting and weakens the term sheet a lender is willing to offer.

The second is underestimating carry. Sponsors who size the loan to cover only acquisition and renovation costs, without a dedicated interest reserve, sometimes run short on cash before the property stabilizes.

H Equities evaluates and structures first mortgage bridge loans from $5 million to $50 million, interest-only, with terms typically 12 to 24 months, nationwide. Sponsors bring a request when the property or plan does not fit a bank's timeline or leverage, including acquisitions under a tight contract, value-add repositioning, and situations where mezzanine debt, preferred equity, or co-GP equity alongside the bridge loan fills the remaining gap in the capital stack.