Bridge loan
BankingDefinition
Short-term financing to "bridge" a gap between immediate cash needs and a longer-term funding source. Commercial real estate uses bridge loans to acquire and renovate properties before refinancing into permanent debt; PE firms use bridge loans during deal closings.
High rates, short tenor (6-24 months), often non-recourse. Bridge loan defaults clustered in 2024-2025 as commercial real estate values fell and refinancing into permanent loans became impossible at higher rates.
High rates, short tenor (6-24 months), often non-recourse. Bridge loan defaults clustered in 2024-2025 as commercial real estate values fell and refinancing into permanent loans became impossible at higher rates.