Bridge Loan

Methodology authored by Zach Wade, Wade Intel — operator-led lender tech methodology firm. Definitions validated against production borrower-validation runs with working bridge lenders. · Last reviewed 2026-07-10

What is Bridge Loan?

A short-term loan (typically 6-24 months) used in real estate to bridge the gap between acquiring a property and securing long-term financing or selling the asset. Bridge loans are funded by private lenders and secured by the property itself.

Why it matters to bridge lenders

Bridge loans are the core product your borrowers are seeking. Understanding the structure — interest reserves, extension options, exit strategies — is essential to evaluating whether a borrower’s plan is realistic. A borrower requesting a 12-month bridge for a ground-up construction project that typically takes 18 months is a red flag.

Example

A borrower acquires a distressed property for $400K using a bridge loan at 12% interest, rehabs it for $150K over 6 months, and sells for $700K. The bridge loan is repaid from sale proceeds.