The Process, Start to Finish
This guide walks through the entire process of getting a bridge loan for commercial real estate, from identifying the right lender to closing.
Step 1: Know What You Need Before You Call
Before reaching out to lenders, have your basics ready: the property address and type, the purchase price or current value, your renovation budget (if applicable), your business plan and exit strategy, and your experience as a sponsor. Lenders who receive organized packages move faster. The borrower who sends a clean deal summary with financials gets a term sheet days before the borrower who sends a vague email.
Step 2: Choose the Right Lender for Your Deal
Not every bridge lender handles every property type. Some specialize in residential fix-and-flip. Others focus on commercial and multifamily. When evaluating lenders, look for experience with your specific asset class, transparency on rates and fees (no hidden costs), the ability to close on your timeline, and references or case studies from similar deals.
Step 3: Get a Term Sheet
A term sheet is a non-binding summary of the proposed loan terms. It outlines the loan amount, interest rate, origination fee, term length, and key conditions. A good lender will issue a term sheet within 24 to 48 hours of receiving your deal package. The term sheet is your opportunity to evaluate the economics before committing to a full application.
Step 4: Understand the Full Cost
Bridge loans carry more fees than traditional bank financing. Understand the full cost structure upfront: interest rate, origination fee, exit fee, and any other charges. Ask the lender for a full fee schedule before signing the term sheet. Common bridge loan costs include origination fees (1 to 3 points), legal and documentation fees, appraisal and inspection fees, and exit or prepayment fees. Factor all costs into your deal model. The bridge loan is a tool, not the end goal. The numbers need to work through the full hold period.
Step 5: Move Through Due Diligence
Once the term sheet is signed, the lender will begin due diligence. This typically includes a property appraisal or valuation, title search and insurance, environmental review (Phase I), borrower background and credit review, and entity documentation. If your renovation will take 18 months, get an 18-month bridge loan with an extension option, not a 12-month loan. Time pressure from a short-term loan can force bad decisions.
Step 6: Close and Execute
Closing on a bridge loan is faster than conventional financing, often 2 to 4 weeks from term sheet to funding, and sometimes faster for experienced borrowers with clean deals. After closing, execute your business plan and keep your lender updated on progress, especially if you have a construction holdback with draw schedules.
Work With a Lender Who Knows Real Estate
The best bridge loan experience comes from working with a lender who understands your property type from an operator's perspective, not just a financial one. At Requity Lending, our team has acquired and managed over 30 commercial properties. That experience informs how we underwrite, how fast we move, and how we structure deals to set borrowers up for success.
Request a term sheet or call us to discuss your deal. No credit pull required for an initial quote.
Questions to Ask Every Lender Before You Sign
Not all bridge lenders are the same, and term sheets can look similar on the surface while hiding significant differences in execution. Before signing, ask these questions:
Do you have direct experience with my property type? A lender who has financed manufactured housing communities will move faster on an MHP deal than one who has never seen the asset class. Ask for examples from their deal history.
What is your actual closing timeline? Ask for the last three deals they closed and how long each took from term sheet to funding. Advertised timelines and actual timelines often differ.
Are all fees disclosed upfront? A responsible lender will give you a complete fee schedule including exit fees, extension fees, and prepayment penalties before you sign. Evasiveness on fees is a red flag.
Frequently Asked Questions
How long does it take to get a bridge loan for commercial real estate?
With a private bridge lender, most commercial bridge loans close in 10 to 21 days from term sheet. Experienced borrowers with clean packages and familiar asset types can close faster. Deals with title issues or environmental concerns may take 3 to 4 weeks.
What documents do I need for a commercial bridge loan?
Most bridge lenders require a property executive summary, the purchase contract or ownership documents, trailing 12-month financials for the property, a renovation budget if applicable, and borrower entity documents. Unlike banks, private lenders typically do not require personal tax returns for an initial term sheet.
What is a typical origination fee on a commercial bridge loan?
Commercial bridge loan origination fees typically range from 1.5 to 3 points (percent of loan amount). Some lenders also charge exit fees of 0.5 to 1 point at payoff. Always get full fee disclosure before signing the term sheet.
Can I get a bridge loan with bad credit?
Private bridge lenders focus primarily on the asset and the business plan, not the borrower's credit score. Significant credit issues may result in lower LTV or additional reserves, but they rarely disqualify a deal outright when the property fundamentals and exit strategy are strong.
What happens if I cannot repay a commercial bridge loan at maturity?
Most bridge lenders offer extension options, typically 6 months at a time with an extension fee and possibly additional conditions. If you cannot extend or refinance, the lender has the right to begin enforcement proceedings. Planning the exit before the bridge loan closes is essential to avoid this scenario.