Commercial Bridge vs Permanent Financing

On commercial real estate, a bridge loan is fast, flexible, and short-term, used to acquire or reposition a property. Permanent financing is cheaper and long-term, used once the property is stabilized. Most projects use a bridge first, then refinance into permanent debt.

When to use a bridge loan

• Close fast on an opportunity before permanent financing is possible.
• Reposition or stabilize a property (lease-up, renovation) that does not yet qualify for permanent debt.
• Pull equity (cash-out) to move on the next deal.

When to use permanent financing

• The property is stabilized with steady, documented income.
• You want the lowest long-term rate and a longer term.
• You are holding for the long run, not transitioning.

The typical path

Acquire with a bridge loan, execute your business plan to stabilize the asset, then refinance into permanent debt, agency, insurance, or wholesale, at a lower long-term rate. The bridge wins the deal; the permanent loan keeps it.