Bridge Loan
Quick answer
A bridge loan is short-term, usually floating-rate senior debt used to fund a transitional business plan until the asset reaches a stabilized exit.
Bridge loans fund acquisition, lease-up, renovation, or recapitalization when an asset does not yet produce enough income for permanent debt. Terms typically run 12–36 months with extension options, leverage runs 65–75% LTC, and pricing floats over SOFR with an interest reserve. The exit is normally a sale or a refinance into permanent or agency debt.
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