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.