From cash-flowing rentals to new construction and commercial acquisitions, your deal is unique. Stop wasting time with banks that don't get it. We instantly match your project with the right partner from our network of 6000+ lenders.
Both offer short-term commercial financing, but bridge loans and hard money loans serve different purposes. Learn which is right for your project.
Key Takeaways
Understanding the differences between bridge loans and hard money loans is essential for choosing the right short-term financing. While both serve commercial real estate investors, they have distinct use cases, costs, and qualification requirements.
78%
of commercial real estate investors prefer bridge loans for time-sensitive acquisitions
Source: CBRE Research
5-15 days
typical closing time for bridge loans vs 60-120 days for traditional financing
Source: Mortgage Bankers Association
3-7 days
fastest closing times for hard money loans
60-70%
typical LTV for hard money loans (asset-based lending)
| Feature | Bridge Loans | Hard Money Loans |
|---|---|---|
| Primary Use | Transitional financing, value-add acquisitions | Fix-and-flip, distressed properties, quick closes |
| Interest Rates | 8-13% | 10-18% |
| Loan Term | 12-36 months | 6-24 months |
| Origination Fees | 1-3 points | 2-5 points |
| Max LTV | Up to 80% | 60-75% (of ARV) |
| Time to Close | 2-4 weeks | 5-14 days |
| Credit Requirements | Moderate (650+ typical) | Minimal (asset-focused) |
| Documentation | Moderate (financials, experience) | Minimal (property-focused) |
| Typical Lenders | Debt funds, banks, institutional | Private individuals, small funds |
A bridge loan is short-term financing designed to "bridge" the gap between two financial events—typically the acquisition of a property and its stabilization or refinance into permanent financing. Bridge loans are commonly used for:
Bridge lenders typically include institutional debt funds, specialty finance companies, and banks with bridge loan programs. They evaluate deals based on the borrower's experience, the property's business plan, and the exit strategy.
“Bridge loans have become the financing of choice for value-add investors who need speed and flexibility to capitalize on market opportunities. The ability to close in days rather than months often makes the difference between winning and losing a deal.”
A hard money loan is an asset-based loan where the property serves as the primary source of underwriting, with minimal focus on the borrower's creditworthiness. The loan is "hard" in the sense that it's secured by a hard (tangible) asset. Hard money loans are commonly used for:
Hard money lenders are typically private individuals or small funds who make lending decisions quickly based on the property's value and the borrower's equity investment.
Bridge loans are the better choice when:
Hard money loans are the better choice when:
Here's how the total costs compare for a $1,000,000 loan held for 12 months:
The $30,000 difference may be worth it if the hard money loan's speed allows you to secure a deal you'd otherwise lose, or if you don't qualify for a bridge loan.
No, while both are short-term financing options, they serve different purposes. Bridge loans are typically used for transitional situations like property acquisitions before permanent financing, while hard money loans are asset-based loans often used for fix-and-flip projects or situations where speed is critical and credit is less important.
Bridge loans generally have lower rates (8-13%) compared to hard money loans (10-18%). Bridge loans from institutional lenders have more competitive pricing because they focus on borrower quality and exit strategy, while hard money lenders charge premium rates for speed and flexibility.
Yes, hard money loans are primarily asset-based, meaning the property's value is more important than your credit score. Lenders focus on the loan-to-value ratio and the property's after-repair value rather than personal financial history.
Our team can analyze your specific situation and match you with the best financing option from our network of bridge and hard money lenders.
Get Expert AdviceFinancing solutions for every stage of the commercial property lifecycle
Financing for the purchase of new commercial assets
Rate, term, and cash-out solutions for existing commercial debt
Long-term, fixed-rate financing for stabilized commercial properties
Short-term funding for quick acquisitions or property stabilization
Securitized, large balance non-recourse commercial real estate mortgages
Government-backed financing for owner-occupied commercial real estate
Commercial financing
Ready to secure your next deal?
Fast approvals, competitive terms, and expert guidance for investors and businesses.