How Does A Bridge Loan Work?

  • Finance

A bridge loan is short-term financing that covers a gap between two financial events. Most commonly, it helps you buy a new property before you sell your current one. In business, it can cover operating costs while you wait for long-term funding or incoming revenue.

Think of it as a temporary cash advance backed by an asset. You repay it once your long-term financing or asset sale comes through.

Bridge loans usually last:

  • 6 to 12 months for real estate
  • Up to 24 months in some commercial cases

They are typically secured by property or business assets, which lowers the lender’s risk but increases yours if you cannot repay.

R&D Offer Quiz

Step 1 of 3

Answer to find out if you're eligible for R&D tax credits.

Do the activities performed relate to a new or improved business component’s function, performance, reliability, quality, or composition?(Required)
For Example: A mid-sized packaging company develops a slightly modified cardboard box design to improve its stacking strength (reliability) for warehouse storage, involving minor adjustments to the corrugation pattern to reduce collapse under standard weight loads.
Is your company trying to discover information to eliminate uncertainty concerning the capability or method for developing or improving a business component?(Required)
For Example: A furniture manufacturer investigates whether a cheaper wood adhesive can hold joints as effectively as the current one during assembly, testing bond strength to resolve doubts about its capability in standard production lines.
Do the activities performed constitute a process of experimentation?(Required)
For Example: An auto parts supplier runs a series of bench tests on different lubricant formulations to find one that reduces friction in engine bearings more effectively, systematically comparing wear rates over simulated operating cycles.