Bridge Loan
Short-term financing used to bridge the gap between purchasing a new property and securing permanent financing.
Definition
A bridge loan provides short-term financing (typically 6-24 months) to cover the gap between acquiring a property and obtaining long-term financing or selling another asset. Bridge loans are common in scenarios where an investor needs to close quickly, is waiting for a property to sell, or needs time to stabilize a property before qualifying for permanent financing. Interest rates are higher than long-term loans (typically 8-12%) and may be interest-only with a balloon payment at maturity. Bridge loans are popular with BRRRR investors who need to acquire and rehab before refinancing into a permanent DSCR loan.
How This Relates to DSCR Loans
Bridge loans and DSCR loans work together in sequence — the bridge funds acquisition and rehab, then the DSCR loan provides permanent financing once the property is stabilized and leased.
Related Terms
Hard Money Loan
A short-term, asset-based loan from a private lender, typically used for fix-and-flip or bridge financing.
BRRRR Strategy
Buy, Rehab, Rent, Refinance, Repeat — a strategy for recycling capital to build a rental portfolio.
Cash-Out Refinance
Replacing an existing mortgage with a larger one and taking the difference in cash.
Interest-Only
A loan payment structure where you pay only interest for an initial period, with no principal reduction.
Compare rates from hundreds of lenders instantly. No personal info required.