Commercial Bridge Financing—
Capital When Timing Matters
Short-term, strategic bridge financing for commercial properties $2M+—enabling acquisitions, refinances, and transitions with speed and clarity.
Time-sensitive • Structured exits • Canada-wide
INTERIM CAPITAL SOLUTIONS
Understanding Commercial Bridge Financing in Canada
Commercial bridge financing provides short-term capital for transitional real estate situations—when timing, property condition, or circumstances don't align with conventional permanent financing requirements. In Canada's dynamic commercial real estate market, bridge loans serve as a critical tool for investors and developers navigating acquisitions, repositioning, lease-up periods, and refinancing gaps.
Unlike permanent commercial mortgages with their 5-10 year terms and 25-30 year amortizations, bridge financing is designed for specific, time-bound objectives. Terms typically range from 6 to 24 months, with interest-only payments preserving cash flow during the transition period. The key differentiator is the exit strategy—every bridge loan requires a clear, documented path to repayment, whether through refinancing, sale, or stabilization.
Bridge lenders—including private capital providers, alternative lenders, and specialized funds—focus on different criteria than conventional lenders. While permanent financing requires stabilized occupancy and proven cash flow, bridge financing emphasizes asset quality, exit viability, and sponsor experience. This flexibility enables transactions that would otherwise be impossible within traditional lending frameworks.
For commercial properties valued at $2M and above, bridge financing provides the strategic runway to execute business plans, complete value-add improvements, achieve stabilization, or simply capture time-sensitive opportunities before competitors. When structured correctly with experienced guidance, bridge financing transforms from expensive short-term debt into a precision tool for portfolio growth.
STRATEGIC APPLICATIONS
When Commercial Bridge Financing Makes Sense
Bridge financing isn't a default solution—it's a strategic tool for specific transitional situations where conventional financing timelines or requirements don't align with your objectives.
Acquisition Before Permanent Financing
Secure a property quickly while arranging optimal long-term financing, avoiding missed opportunities due to conventional lending timelines.
Refinancing at Maturity
Bridge the gap when your existing mortgage matures before permanent refinancing is complete, avoiding default or forced sale.
Lease-Up or Stabilization Period
Finance newly constructed or repositioned assets during lease-up until occupancy meets permanent financing requirements.
Property Repositioning or Renovation
Fund value-add improvements, conversions, or renovations that will enhance property value and cash flow.
Time-Sensitive Opportunities
Capitalize on acquisitions, portfolio deals, or distressed assets where speed is essential to secure the transaction.
Transitioning Between Lenders
Move from private or alternative lenders to institutional financing, or restructure debt across multiple properties.
THE PROCESS
How Commercial Bridge Financing Works
From initial assessment through funding and exit execution, we manage the entire bridge financing process with precision and transparency.
Property & Exit Strategy Review
We assess your asset, current situation, and develop a clear exit strategy timeline that lenders will support.
Valuation & Underwriting
Comprehensive property analysis including appraisal, environmental review, and financial projections to establish loan parameters.
Lender Sourcing
We match your deal with appropriate bridge lenders—private capital, alternative lenders, or specialized funds—based on your specific requirements.
Term Sheet & Documentation
Negotiate optimal terms, coordinate due diligence, and manage the documentation process through to commitment.
Funding & Exit Execution
Close the bridge financing and immediately begin executing the exit strategy—whether refinancing, sale, or stabilization.
LENDER CRITERIA
Key Underwriting Factors for Bridge Loans
Understanding how bridge lenders evaluate transactions helps you prepare stronger applications and negotiate better terms.
Loan-to-Value (LTV)
Bridge lenders typically advance 60-75% of current value, with some offering higher leverage based on as-stabilized or as-complete valuations for strong sponsors.
Exit Strategy Viability
The most critical factor—lenders need confidence in your path to repayment, whether through refinancing, sale, or lease-up completion.
Property Condition & Location
Asset quality, market fundamentals, and location significantly impact leverage and pricing. Prime locations in growing markets command better terms.
Cash Flow & DSCR
While bridge loans can be structured for transitional properties with limited cash flow, any existing income strengthens the application.
Market Demand
Lenders assess local market conditions, comparable transactions, and demand drivers to validate exit assumptions.
Borrower Experience
Sponsor track record with similar properties and successful bridge exits significantly impacts underwriting and terms.
EXIT PLANNING
Bridge-to-Permanent Strategies
The most successful bridge financing transactions are planned with the exit in mind from day one. Bridge-to-permanent refinancing requires careful coordination of timelines, milestones, and lender requirements.
Refinance into Conventional
Meet stabilized occupancy and cash flow requirements for traditional lenders
Refinance into CMHC-Insured
Multi-unit properties meeting MLI Select criteria for optimal terms
Property Sale
Maximize value through repositioning before sale to next investor
Equity Investment
Attract institutional equity partners upon stabilization
FINANCING OPTIONS
Bridge Financing vs Other Options
Understanding how bridge financing compares to alternatives helps determine the right capital structure for your specific situation.
| Factor | Bridge Financing | Permanent Financing | Private Term Loans |
|---|---|---|---|
| Term Length | 6-24 months | 5-10 year terms | 1-3 years |
| Amortization | Interest-only | 25-30 years | Interest-only or short amortization |
| Rate Type | Higher, floating | Lower, fixed available | Highest, floating |
| Speed to Close | 2-4 weeks | 6-12 weeks | 1-2 weeks |
| Property Requirements | Transitional acceptable | Stabilized required | Flexible |
| Exit Strategy | Required & documented | Not applicable | Required |
| Ideal For | Transitional situations | Long-term holds | Urgent or complex deals |
BROKER ADVANTAGE
Why Use a Commercial Mortgage Agent for Bridge Financing
Bridge financing requires access to specialized lenders, rapid execution, and expert structuring. A commercial mortgage agent provides advantages that direct approaches simply cannot match.
Access to Multiple Bridge Lenders
Relationships with private capital providers, alternative lenders, and specialized funds across Canada—not just one option.
Exit Planning Expertise
Structuring bridge terms that align with your permanent financing or sale timeline, avoiding costly extensions.
Faster Execution
Pre-existing lender relationships and deal flow credibility accelerate underwriting and approvals.
Risk Mitigation
Identifying potential issues early, ensuring documentation supports your exit strategy, and negotiating protective terms.
Expert Guidance
Navigate complex bridge financing with strategic support from initial assessment through exit execution.
BRIDGE FINANCING IN ACTION
Anonymized Bridge Financing Scenarios
Representative scenarios illustrating how bridge financing structures solve real transitional capital challenges for commercial investors.
Multi-Unit Acquisition Pending Lease-Up
Situation
Investor acquiring 24-unit apartment building at 65% occupancy in Ottawa. Conventional lenders required 85%+ occupancy.
Structure
18-month bridge loan at 70% LTV with interest reserve. Allowed immediate acquisition while executing lease-up strategy.
Exit
Refinanced into CMHC-insured permanent financing at month 14 after reaching 90% occupancy with qualified tenants.
Bridge Refinance at Loan Maturity
Situation
Portfolio owner with $4.2M mortgage maturing on retail property. Permanent refinancing delayed due to tenant renewal negotiations.
Structure
12-month bridge loan covering existing debt plus working capital. Provided runway to complete lease renewals.
Exit
Completed tenant renewals with 5-year terms, then refinanced into conventional permanent financing.
Property Repositioning Bridge
Situation
Sponsor acquiring underperforming office building for conversion to mixed-use with ground floor retail and upper floor residential.
Structure
24-month bridge loan with construction holdback for renovation. Structured as bridge-to-permanent pipeline.
Exit
Upon completion and certificate of occupancy, refinanced into long-term financing based on new rental income.
FREQUENTLY ASKED QUESTIONS
Commercial Bridge Financing FAQ
Navigate Transitional Capital with Confidence
Whether you're acquiring, repositioning, or bridging to permanent financing, strategic guidance ensures optimal structure and successful exits.