When a commercial bridge loan fits the deal
A commercial bridge loan is a short hold, not a cheaper permanent mortgage. It is useful when the property or the timing does not fit a long-term lender yet. Kelly Dutton at OneClick Commercial Funding places bridge requests next to the commercial loans that are supposed to pay them off.
Situations where bridge is the point
A building in lease-up, a renovation that will change the rent roll, or a purchase that has to close before a permanent lender can finish underwriting. The bridge buys time. It does not fix a property that cannot support a takeout.
If the plan is apartments after the work, the exit should look like a multifamily DSCR loan. If the plan is to finish construction, read how construction draws work before you stack a bridge on top of an unfinished budget.
What lenders want to see on the exit
Who pays the bridge off, when, and with what income. “We will refinance” is not an exit. A term sheet, a sale contract, or a realistic permanent-loan scenario is. Interest reserves and extension fees belong in the sources and uses. Borrowers who only model the note rate miss the cost of the hold.
Bank guidance on commercial real estate risk is laid out in the OCC commercial real estate lending handbook. Bridge lenders are often outside that bank box, and they price for the shorter term and the weaker current cash flow.
When to skip it
If the property is stabilized and the only problem is shopping for a rate, a bridge adds fees without solving anything. Go to the permanent apartment, mixed-use, or hospitality lane instead. The document checklist is the same starting point.
What this is not
This is not a commitment to lend. Loan terms, amounts, and rates are not guaranteed. Every file still goes through lender approval, credit review, and underwriting.
About the author
Kelly Dutton is a senior commercial mortgage broker at OneClick Commercial Funding in Phoenix. She arranges financing for business owners and real estate investors. She is a broker, not a lender. Read more on the About Kelly Dutton page.
Next step
Call (480) 363-1412 or visit kelly-dutton.com to request a financing call with Kelly Dutton at OneClick Commercial Funding.