Glossary Term

Bridge Loan

What is a Bridge Loan?

A bridge loan is a short-term financing solution designed to "bridge" the gap between two financial transactions, such as buying a new property before selling an existing one or securing long-term financing. These loans are commonly used in real estate by investors, developers, and homeowners to manage liquidity constraints during transitional periods.

How Bridge Loans Work

Bridge loans are typically secured by collateral, such as real estate, and are structured for quick approval and funding. The loan amount is often based on the equity in an existing property or the projected value of the new investment. Key features include:

Short Duration: Bridge loans generally have terms ranging from 6 to 24 months, giving borrowers enough time to complete their transitional goals.

Higher Interest Rates: Due to the short-term nature and higher risk, bridge loans usually come with higher interest rates compared to traditional financing.

Flexible Repayment: Repayment can occur through the sale of the existing property, securing permanent financing, or generating revenue from the new property.

Common Uses of Bridge Loans

Bridge loans are versatile and can be used for various scenarios, including:

Real Estate Transactions: Enabling buyers to purchase a new property before their current home sells, avoiding delays or lost opportunities.

Fix and Flip Projects: Providing quick access to capital for investors to purchase, renovate, and resell properties.

Construction Financing: Covering costs during the development phase of a project until permanent financing is secured.

Business Growth: Assisting businesses in funding operational needs or expansions while waiting for long-term financing or revenue inflows.

Advantages of Bridge Loans

Bridge loans offer several benefits for borrowers:

Fast approval and funding, allowing borrowers to act quickly on opportunities.

Flexibility in structuring repayment and loan terms.

Access to significant capital during critical transitions.

Challenges and Risks

While bridge loans are valuable tools, they come with potential risks:

Higher interest rates and fees compared to long-term loans.

Short repayment periods, which can pressure borrowers to meet deadlines.

Dependence on the success of the planned financial transition, such as selling a property or securing additional financing.

Bridge Loans with LYNK Capital

At LYNK Capital, we specialize in providing flexible bridge loan solutions tailored to the unique needs of real estate investors and developers. Our streamlined process ensures quick approvals and competitive terms, allowing you to seize opportunities without delay. Contact us today to learn more about how a bridge loan can help you achieve your financial and investment goals.

Want to Learn More About Our Loan Products?

Get in Touch

Want more information? Have a deal to discuss? Let us know!

Call or Email Us

407-476-2500

info@lynkcapital.com

Availability

Monday - Friday

9:00am to 6:00pm EST

About

Fast Links

Connect

*LYNK Capital Fund, L.P. operates as LYNK Investments, LLC in the state of Texas.

LYNK Capital offers fix & flip loans, new construction loans, bridge loans, and DSCR rental loans to real estate investors.

Disclaimers: LYNK Capital makes loans solely for business purposes (and not for personal or consumer use) and is exempt from licensing in all states in which it operates. LYNK Capital Fund, L.P. does not lend on owner-occupied properties. Listed rates, terms, and conditions are offered only to qualified borrowers, may vary by loan product, deal structure, property state, or other applicable considerations, and are subject to change at any time without notice. No information on this site is intended to, or shall, create a legally binding commitment or obligation on the part of LYNK Capital Fund, L.P. and all terms are expressly subject to LYNK Capital's credit, legal, and investment approval process.

Private Lending Glossary - Bridge Loan