Commercial real estate moves fast — and traditional bank financing rarely keeps up. A commercial bridge loan gives investors and developers the short-term capital they need to seize time-sensitive opportunities, stabilize assets, and bridge the gap to permanent financing. This guide covers everything you need to know.
What Is a Commercial Bridge Loan?
A commercial bridge loan is a short-term loan (typically 12–36 months) secured by commercial real estate. Unlike residential bridge loans, commercial bridge loans are underwritten based on the property's income potential, as-is value, and stabilized value — not just the borrower's personal finances.
Commercial properties eligible for bridge financing include:
- Office buildings (single-tenant and multi-tenant)
- Retail strip centers and shopping centers
- Industrial warehouses and flex space
- Mixed-use properties
- Hotels and hospitality properties
- Self-storage facilities
- Multifamily (5+ units) apartments
- Medical office and specialty commercial
Most Common Commercial Bridge Loan Use Cases
1. Acquisition Before Permanent Financing is Ready
Commercial bank loans and SBA loans take 60–90+ days to close. A bridge loan lets you lock up the property in 7–14 days while you line up permanent financing in parallel.
2. Value-Add Renovation
Buying a partially vacant office building and planning to lease it up? A bridge loan funds the acquisition and renovation. Once the property is stabilized and producing income, you refinance to a permanent commercial mortgage at a lower rate.
3. Lease-Up Bridge
New construction or heavily vacant properties don't qualify for conventional commercial financing until they reach a minimum occupancy threshold (typically 85–90%). A bridge loan carries you through the lease-up period.
4. Maturity Default or Balloon Payment
If your existing commercial loan is coming due and your bank won't renew, a bridge loan buys you 12–24 months to stabilize the property or find a new permanent lender.
5. Discounted Payoff / Distressed Purchase
REO properties, foreclosure auctions, and motivated sellers often require fast closes. A bridge loan can close in 7–10 days — essential for these time-critical acquisitions.
How to Qualify for a Commercial Bridge Loan
Commercial bridge loans are underwritten differently from residential loans. Lenders focus on:
| Underwriting Factor | What Lenders Evaluate |
|---|---|
| Property Type & Market | Asset class, location quality, market liquidity |
| Loan-to-Value (LTV) | Usually max 70% as-is; 75% stabilized |
| Debt Service Coverage | Current DSCR or projected stabilized DSCR |
| Exit Strategy | Sale, CMBS, bank refinance, SBA loan |
| Sponsor Experience | Track record with similar asset class |
| Loan Amount | $500,000 – $25,000,000+ (we fund up to $25M) |
Commercial Bridge Loan Rates, Fees, and Terms
Commercial bridge loans carry higher rates than residential bridge loans, reflecting the greater complexity and perceived risk of commercial assets. Typical market terms:
- Interest Rate: 9.0%–13% per year (floating or fixed)
- Origination Fee: 1.5–3 points
- Term: 12–36 months, with extension options
- Amortization: Interest only (no principal payments during term)
- Prepayment: Often none after month 3–6
- Recourse: Full recourse for smaller loans; non-recourse available for $5M+
Your actual rate depends on property type (multifamily gets best rates), LTV (lower is better), market (primary market = lower risk), sponsor experience, and loan size (larger loans often get better terms).
The Commercial Bridge Loan Approval Process
Our commercial bridge loan process moves faster than any conventional commercial lender:
- Day 1: Submit application with property details, purchase contract, and business plan
- Day 1–2: Initial underwriting review and term sheet issued
- Day 2–4: Full document collection — rent rolls, financials, entity docs
- Day 4–6: Appraisal ordered (commercial appraisals take 3–5 business days; we start immediately)
- Day 7–14: Final underwriting, loan approval, and closing
Compare this to a traditional bank's 60–90 day timeline. For competitive acquisitions, the difference is the deal itself.
Commercial Bridge Loans vs. Conventional Commercial Mortgages
| Factor | Commercial Bridge Loan | Conventional Commercial Mortgage |
|---|---|---|
| Closing Time | 7–14 days | 60–90+ days |
| Rate | 9–13% | 6–8% (stabilized) |
| Occupancy Requirement | None (value-add OK) | 85–90%+ required |
| Term | 12–36 months | 5–30 years |
| Documentation | Minimal | Extensive |
| Best For | Acquisitions, value-add, distressed | Stabilized, income-producing assets |
The playbook: use a commercial bridge loan to acquire and stabilize, then refinance into a lower-rate conventional commercial mortgage once the property qualifies. This is the standard approach for any value-add commercial deal.
Finance Your Commercial Deal in 7–14 Days
$500K – $25M · Office, Retail, Industrial, Multifamily · 35 States
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