A commercial bridge loan is short-term financing designed to move fast. It bridges the gap between where you are now and where you need to be — whether that is closing on an acquisition, unlocking equity, or buying time while you secure long-term financing.
Banks are not built for speed. When a deal has a tight deadline or a structure that does not fit a traditional checklist, a bridge loan is often the only tool that keeps the deal alive.
Nelson Funding has placed over $600 million across 80+ projects. We close bridge loans in as little as 7 to 14 days. The $5,575,000 Dallas luxury portfolio we closed in 10 days is one example. This guide explains exactly how bridge loans work, when to use one, and how to get funded fast.
Compared to traditional bank loans, bridge loans trade lower rates for speed, flexibility, and certainty of closing. That tradeoff is exactly what keeps deals alive when timing is everything.
What Is a Commercial Bridge Loan?
A commercial bridge loan is short-term financing, typically 12 to 36 months, used to acquire, refinance, or reposition a commercial property quickly. It fills the gap between an immediate capital need and a long-term financing solution.
Bridge loans are asset-based. Lenders focus on the property’s value and your exit strategy — not years of tax returns or a perfect credit score. You use it to get the deal done now, then refinance into permanent financing once the asset is stabilized or your situation improves.
What Makes a Bridge Loan Different from a Traditional Loan?
- Traditional loans: 60 to 90 days to close, strict documentation, rigid underwriting
- Bridge loans: 7 to 21 days to close, asset-based approval, flexible structure
- Traditional loans: designed for stabilized, income-producing properties
- Bridge loans: designed for transitional assets, time-sensitive deals, and complex situations
- Traditional loans: lower rates but slower and harder to qualify for
- Bridge loans: higher rates in exchange for speed, flexibility, and certainty of execution
How Do Commercial Bridge Loans Work?
A commercial bridge loan is typically interest-only, meaning you pay only the interest each month and repay the principal in full at the end of the loan term. This keeps monthly payments lower during the holding period and maximizes your cash flow while you execute your plan.
The loan is secured by the commercial property itself. Most bridge loans are structured at 65 to 75 percent loan-to-value. Nelson Funding closed the $5.575M Dallas portfolio at 70% LTV in 10 days — on the higher end of what the market offers for this type of deal.
1. The Loan Itself
- Loan amounts: typically $1M to $50M+
- Loan-to-value: 65% to 75% in most cases
- Interest rate: higher than permanent loans, reflecting the speed and flexibility
- Structure: interest-only payments, balloon payment at maturity
2. The Timeline
- Term: 12 to 36 months
- Close time: 7 to 21 days with the right broker
- Extensions: often available if the exit strategy needs more time
3. The Exit Strategy
Every bridge loan needs a clear plan for how it gets repaid. Lenders will not fund a bridge loan without one. The three most common exits are:
- Refinance into a permanent loan once the property is stabilized
- Sale of the property at or after completion of value-add work
- Construction completion and transition to a permanent or takeout loan
“In the luxury rental space, liquidity is the ultimate competitive advantage.” — Dylan Nelson, Founder, Nelson Funding
When Should You Use a Commercial Bridge Loan?
A commercial bridge loan is best used when speed, flexibility, or deal complexity makes traditional financing impractical. It is designed for time-sensitive acquisitions, value-add properties, and situations where a bank cannot close fast enough.
Acquisition Under a Tight Deadline
You found the right property and the seller is not waiting. Banks cannot close in 10 days. Bridge lenders can. This is the most common reason investors use bridge financing, and it is where Nelson Funding wins deals every week.
Value-Add and Repositioning
You are buying a property that needs work before it can support permanent financing. Maybe it has low occupancy, deferred maintenance, or needs renovation. Banks will not lend against future potential. Bridge lenders fund the deal as it is today, giving you time to create the value.
Refinancing Out of an Expiring Loan
Your current loan is maturing and your permanent financing is not ready yet. A bridge loan buys you 12 to 24 months to stabilize the asset, improve financials, or wait for better market conditions before locking in long-term debt.
Equity Unlock for New Opportunities
You have equity sitting in an existing asset and you want to deploy it quickly into a new deal. A bridge loan lets you pull that capital out fast — the way Nelson Funding did with the Dallas luxury rental portfolio, putting $5.575M to work in 10 days so the borrower could pursue the next opportunity without missing a beat.
Bank Rejection or Credit Complexity
A bank said no because of your credit, deal structure, or property type. Bridge lenders underwrite the asset, not just the borrower. If the collateral is strong and the exit makes sense, there is usually a path forward.
Key Benefits of Commercial Bridge Loans
The core benefits of a commercial bridge loan are speed, flexibility, and high leverage. These three advantages make bridge loans the go-to tool for investors who need to close fast, fund non-stabilized assets, or move when banks cannot.
Speed
This is the defining advantage. Nelson Funding closes bridge loans in 7 to 14 days. When a deal requires speed and certainty of execution, no other financing product comes close.
Flexibility
Bridge loans are structured around your deal, not a bank’s checklist. Non-stabilized properties, complex ownership structures, credit challenges, unconventional asset types: all fundable with the right bridge lender and the right broker.
High Leverage
Bridge loans can reach 70 to 75 percent LTV on strong deals. The Dallas portfolio closed at exactly 70% LTV, providing the borrower with significant capital against luxury assets while preserving equity.
Interest-Only Payments
Monthly payments cover interest only during the bridge period. This preserves cash flow while you execute your value-add plan, renovation, or lease-up strategy.
Competitive Advantage
Investors who can close fast win deals that others cannot. Bridge financing turns your speed into a competitive advantage in markets where sellers and brokers prioritize certainty of close over purchase price.
What to Watch Out For with Bridge Loans
Bridge loans come with higher rates, shorter terms, and a required exit strategy. None of these are dealbreakers for the right situation, but all three need to be understood and planned for before you commit.
- Higher interest rates: bridge loans cost more than permanent financing. The premium buys you speed and certainty of execution.
- Shorter terms: typically 12 to 36 months. Your exit timeline needs to be realistic before you commit.
- Exit strategy required: lenders must see exactly how the loan will be repaid. No clear exit, no funding.
- Fees and costs vary: origination fees, extension fees, and prepayment terms differ by lender. Understand the full cost structure before signing a term sheet.
The right broker helps you model the true cost of the loan against the opportunity cost of not doing the deal. In most cases, the math strongly favors moving forward.
Real Bridge Loans Closed by Nelson Funding
These are real transactions. Different markets, different deal types, same result: funded fast.
$5,575,000 Bridge Loan — Dallas, TX — Closed in 10 Days
Three luxury single-family rentals in Dallas needed a rapid capital solution. The borrower needed to unlock equity quickly to pursue additional investment opportunities. Nelson Funding structured a 70% LTV bridge facility and moved from application to funding in 10 days.
“Closing a $5.5M+ deal in 10 days at 70% LTV is exactly why clients come to Nelson Funding. In the luxury rental space, liquidity is the ultimate competitive advantage.” — Dylan Nelson
$3,425,000 Bridge Loan — Holladay, UT — Luxury Estate
A luxury estate in the Holladay market needed bridge financing to transition between strategies. Nelson Funding structured the loan around the asset and the borrower’s exit plan — not a rigid underwriting checklist.
What These Deals Have in Common
- Both required speed that a traditional bank could not provide
- Both involved high-value assets with clear exit strategies
- Both closed because Nelson Funding had the right lender relationship for the specific deal
View more transactions at Nelson Funding recent closings.
How to Get a Commercial Bridge Loan Fast
The fastest path to a bridge loan is working with a broker who has the right lender relationships already in place. Cold-calling lenders one at a time costs you days you do not have. Here is how the process works at Nelson Funding.
- Submit your deal. Property address, loan amount needed, current situation, and your exit strategy. Do not overthink it. A paragraph is enough to get started.
- Same-day review. A real person looks at your deal, not an automated form. You get a straight answer on whether we can fund it and at what terms.
- Lender matching. We match your deal to the lender in our network whose appetite fits your specific asset, location, and structure. This is not a mass blast — it is a targeted placement.
- Term sheet. You receive a clear term sheet: loan amount, rate, LTV, fees, and timeline. We walk you through it and answer every question before you commit to anything.
- Closing. Our team coordinates with title, attorneys, and the lender. Most bridge loans close within 10 to 21 days of the initial conversation.
What to Have Ready Before You Call
- Property address and a brief description of the asset
- Loan amount you need and current estimated property value
- Your exit strategy in plain terms: sell, refinance, or stabilize and hold
- Your timeline: when do you need to close?
- Any relevant background: purchase contract, existing debt, renovation plans
That is it. Nelson Funding does not require a 30-page loan application before having a conversation. Tell us about the deal and we will tell you what we can do. See also: how to qualify for a commercial loan.
Bridge Loans vs. Other Commercial Financing Options
A bridge loan is not always the right tool. Here is how it compares to the other main options so you can make the right call for your deal.
- Bridge loan vs. bank loan: Bank loans are cheaper but take 60 to 90 days and require stabilized assets. Bridge loans cost more but close in days and fund deals banks will not touch.
- Bridge loan vs. hard money: Hard money is also fast and asset-based, but typically at lower LTVs and higher rates. Bridge loans from institutional lenders offer better terms for larger, cleaner deals.
- Bridge loan vs. construction loan: Construction loans fund new builds with draw schedules. Bridge loans fund existing assets quickly. If you are buying a completed but non-stabilized property, a bridge loan is usually the right fit.
- Bridge loan vs. DSCR loan: DSCR loans require the property to already be generating sufficient income to cover debt payments. Bridge loans are designed for properties that are not there yet.
Not sure which product fits your deal? Submit it and we will tell you which financing path makes the most sense. For a full overview of every loan type, see our commercial real estate loans guide.
