What is a commercial bridge loan?

A commercial bridge loan is short-term financing (typically 6 months to 3 years) used to 'bridge' the gap between an immediate need and permanent long-term financing. Common uses include acquiring a property before securing permanent financing, funding renovations to increase occupancy or value, or stabilizing a property before refinancing at better terms. Bridge loans are faster to close than traditional commercial loans and have more flexible underwriting, but carry higher interest rates (often 8%–14%) and fees. An exit strategy is essential — lenders want to know how and when you plan to pay off the bridge loan.