Loan type
Business bridge loans: borrowing against a known exit
Short-term money covering the gap until a specific, identifiable event pays it off. The exit is the whole product — without one it is just expensive debt.
At a glance
| Term | Weeks to around 24 months |
|---|---|
| Repayment | Often interest-only, with principal at the exit |
| Secured on | Usually property or another identifiable asset |
| Speed | Days to weeks — speed is the point |
| Cost | Materially above conventional, plus arrangement points |
| The test | Can you name the event, its date, and its probability? |
A good fit when
You have a dated, near-certain event that repays it: a property sale, a refinance already underwritten, a settlement, a funding round that has closed.
A poor fit when
The exit is hoped for rather than contracted. A bridge to nowhere is the most reliably destructive borrowing a small business can do.
What makes it a bridge rather than a loan
A bridge is defined by its exit, not its term. You are not borrowing because the business needs capital; you are borrowing because money that is already coming has not arrived yet.
That makes the central question unusually specific. Not “can I afford the payments” but “what exactly repays this, on what date, and how certain is it?” If you cannot answer all three in one sentence, you are not looking at a bridge.
Exits that actually work
| Exit | How solid is it? |
|---|---|
| A property sale under contract | Strong, though completion dates slip |
| A refinance already underwritten and approved | Strong |
| An SBA loan in underwriting | Moderate — SBA timelines are long and not yours to control |
| A signed contract paying on known dates | Moderate to strong, depending on the counterparty |
| “Sales should recover by spring” | Not an exit. That is a hope, and hopes do not repay bridges |
What it costs, and why
Expect a rate well above conventional borrowing plus arrangement points, and read whether there is a minimum interest period — some bridges charge a set number of months' interest even if you repay sooner, which changes the arithmetic on a fast exit.
- Points up front are normal and come off the proceeds, so borrow enough that the net covers the need. See origination fee.
- Exit fees exist on some structures. Ask.
- Extension terms are the clause that matters most. What does month 13 cost if the sale slips? Settle it before signing, not after.
The cheaper things to check first
- A line of credit you already have, or could arrange, if the gap is recurring rather than one-off.
- Asking the counterparty to accelerate — a deposit, a progress payment, an earlier completion.
- Invoice factoring if the exit is actually an invoice.
- Doing nothing for 30 days. Some gaps close themselves, and a bridge taken a month early costs a month of bridge pricing.
Questions people actually ask
What is a business bridge loan?
Short-term financing covering the gap until a specific event repays it -- a property sale, a completed refinance, a contracted payment. The defining feature is the exit, not the length of the term.
How long is a bridge loan?
Typically from a few weeks up to around two years, with interest-only payments and the principal repaid at the exit. The shorter and more certain the exit, the better the terms you will be offered.
What happens if the exit does not happen?
You extend at a cost, refinance under time pressure, or default. This is the central risk and it is why a bridge against an uncertain event is a bad trade however attractive the headline terms look.