Bridge, Rental and Build
What Is a Bridge Loan?
Short-term capital is a timing tool. This guide covers one of the timings.
Bridge, Rental and Build
The short version, then the substance.
Key Takeaways
- The concept
- The anatomy
- When the math works
The concept. A bridge loan is short-term financing that carries you from one side of a transaction to the other: buying before selling, closing before refinancing, or capturing a deal before permanent money is arranged. It buys time, and time is usually the whole problem.
The anatomy. Secured by real estate, sized to the equity, 12 months or less, interest-only. The exit is defined going in: a sale, a refinance, or another liquidity event with a date on it.
When the math works. Bridge debt costs more than permanent debt, so it pencils when the opportunity it captures is worth more than the carry. A discounted building bought today at bridge pricing beats a fairly priced building lost while the bank deliberated.
The South Texas angle. Averlend underwrites this every week in San Antonio and across Bexar County. If you are working a deal in Alamo Heights or anywhere else in the metro, the theory above comes with a local desk attached: see our San Antonio lending page or send the deal directly.
Questions
Quick answers from the Averlend desk.
The Averlend Promise
Reading is free. So is a deal analysis.
Send the collateral, the numbers, and the exit. An Averlend rep will reach out ASAP, same business day.