What is Bridge Funding?
Bridge funding is short-term, often interest-only capital from $50K to $5MM+ at Prime + 4–8% that exits when a specific event closes: a contract, an acquisition, a property sale. As of 2026, typical structures close in 3–7 business days, stay outstanding for 30–180 days, and carry aggressive early-payoff discounts so you only pay interest for the days you actually use the money.
How It Works
Bridge funding is event-driven capital. It exists to carry a business from where it is now to a specific upcoming event, whether a contract closing, an acquisition funding, a property sale or a permanent facility coming online, and then it exits. The discipline of a good bridge structure is that you only pay interest for the days you actually use the money. If the event closes in 45 days, you carry the cost for 45 days, not for a year.
On paper, the annualized rate can look expensive. But once you understand that the loan functions like a line of credit you pay off in 60 days, the math shifts. You are giving up a few points on a high-margin transaction to get the deal across the finish line. That tradeoff almost always works when the exit is real and visible.
Bridge funding is usually the first step in a longer financing sequence. The bridge closes in days; the larger, cheaper facility takes six to eight weeks to underwrite. Closing the bridge first lets the business keep operating while the permanent structure is assembled in parallel.
The most important part of a bridge structure is the exit. A bridge with no visible repayment source is not a bridge. It is expensive working capital. "Investors who seem interested" is not an exit. An asset-based line already in underwriting, a property under contract, or a signed contract with an assignment of claims is an exit. We will only structure a bridge when the takeout is concrete.
As of 2026, bridge facilities run from $50K to $5MM+. Typical closings happen in three to seven business days, with capital outstanding for 30 to 180 days. Pricing is Prime plus 4–8%, often interest-only, with aggressive early-payoff discounts that reward paying it off as soon as the exit event closes.
Quick Facts
| Facility / Loan Size | Facility sizes from $50K to $5MM+ |
|---|---|
| Funding Timeline | Event-driven exits supported: contract close, property sale, acquisition funding, ABL/senior take-out |
| Best For |
|
Key Features & Benefits
Facility sizes from $50K to $5MM+
Typical close: 3-7 business days from clean file to funded
Capital outstanding 30-180 days in most cases: built to exit, not to amortize
Interest-only payment structures so debt service stays low while the bridge is live
Early-payoff discounts on most products, so you only pay interest for the days you use the money
Pricing roughly Prime + 4-8% as of 2026, depending on speed and structure
Sequencing logic: "one-then-three": bridge first (days), longer facility in parallel (6-8 weeks)
Event-driven exits supported: contract close, property sale, acquisition funding, ABL/senior take-out
Pairs cleanly with: asset-based lending, real-estate cash-out, SBA take-out, contract financing
Bank-friendly: protects the referring banker's relationship by avoiding a long-term commitment elsewhere
Disqualification discipline: we won't structure a bridge with no visible exit (soft investor commitments, speculative appreciation)
Works for both small operating gaps (sub-$250K) and large M&A timing gaps (multi-million)
Terms, costs and timelines
| Collateral | Receivables, inventory, equipment, assignable contract proceeds, not real property |
|---|---|
| Pricing (2026) | Roughly Prime + 4%-8%, typically interest-only |
| Time to close | 3-7 business days from a clean file |
| Time outstanding | 30-180 days in most cases |
| Early payoff | Credit for early payoff on most products, so you pay for the days you use |
| Lien position | First position preferred; subordinated structures available behind an existing factor or ABL |
| Qualifying exits | ABL or SBA in underwriting, signed acquisition with a funding date, assignable contract, property under contract |
| Disqualifying exits | Soft investor interest, expected revenue improvement, speculative asset appreciation |
| Serve fee | A success fee, earned only on closing. Agreed in writing before you sign anything. No retainers, no upfront costs |
How this plays out, with numbers
A specialty contractor doing about $18MM in revenue wins a $4.2MM municipal contract. Mobilization (crews, bonding, materials) runs roughly $600K, and the first progress payment is 75 days out under the contract terms. The company has $2.1MM in receivables from other work and a bank line that is fully drawn. The exit is the contract itself: an assignment of claims on the municipal receivable, plus an asset-based facility already in underwriting against the existing AR book, expected to close in about seven weeks. We place a $650K bridge at Prime plus 6%, interest-only, secured by the existing receivables and subordinated to nothing because the bank line is unsecured. Funding takes five business days. The ABL closes in week eight and retires the bridge. Total interest paid on the bridge: roughly $22K over 58 days. Against a $4.2MM contract the company would otherwise have had to decline, that is not a close call. But it only worked because the exit was two named, dated, documentable events rather than a general expectation that things would improve.
A representative structure, sized to a typical file. Details are generalized, we do not publish client specifics.
When this is the wrong answer
Half of being useful is being clear about what does not work. If one of these describes you, the honest path is below, and it may not run through us.
That is a commercial real estate bridge, underwritten on the property rather than on the business, and it is work we do constantly. Quick to close, and needed all the time. Different structure, different lenders, same firm. Our real estate lending page is the right starting point, and the fastest route is simply to tell us what the property is and when you need to close.
A bridge with no takeout is not a bridge, it is short-term debt at bridge pricing, and in six months it will be the problem instead of the solution. What you probably want is a working capital facility or an asset-based line with an amortization you can actually carry.
Soft equity interest is not an exit and no credible lender will treat it as one. Come back when there is a signed term sheet, and in the meantime look at what your operating assets alone will support.
The diligence cost does not amortize at that size and the pricing gets punishing. A working capital loan or a single-invoice advance is usually the better structure.
Bridge Funding - Common Questions
Get answers to the most common questions about bridge funding
See It In Action
Real companies using Bridge Funding to solve their capital challenges
$1.475MM Bridge for Medical Practice M&A
A surgeon needed $1.475MM in bridge capital before closing his hospital acquisition. We funded it in 2 weeks. A lesson in mentorship and partnership.
Oct 7, 2025
How Long Does Business Financing Really Take?
Business financing timelines vary wildly. Some deals close in days, others take months. Here's exactly what to expect at each stage.
Jan 24, 2026
Subordinated Bridge for Data Center Operator
Data center company needed fast, flexible liquidity to cover construction overruns before their Q1 equity capital close.
Dec 19, 2025
How It Compares
Side-by-side breakdowns of Bridge Funding against the structures it most often competes with
Other Funding Solutions
Working Capital Loans & Lines of Credit
A working capital loan is short-term, revenue-based financing of $100K to $10M+ that funds in 2 to 10 business days, priced at 1.25%–4% per month. As of 2026, it's the fastest way to cover payroll, inventory, or growth-driven cash gaps when a bank can't move quickly enough, and at the same speed as a merchant cash advance it costs roughly half as much because the payment is monthly rather than a daily extraction from sales.
Learn more about Working Capital Loans & Lines of Credit →Invoice Financing
Invoice factoring is the practice of selling unpaid B2B invoices to a factor for 75%–95% of face value within 24–48 hours, then receiving the balance (minus a 0.25%–1% fee per invoice) when the customer pays. As of 2026, pricing typically runs Prime + 1–6%, facility sizes range from $250K to $100MM, and the facility scales automatically with sales. Approval looks at your customers' credit rather than your tax return, which is why it works for growing companies whose financials don't yet tell the full story.
Learn more about Invoice Financing →Equipment Leasing
& Financing
Equipment leasing and financing covers $100K to $50MM+ of machinery, vehicles, or technology over 3–7 year terms, with advance rates of 70%–85% of liquidation value and pricing of Prime + 3–10%. As of 2026, financing the asset directly is almost always cheaper than drawing on a working-capital line for the same purchase. Sale-leaseback structures let you extract 50%–70% of the equity from equipment you already own without adding a new debt covenant.
Learn more about Equipment Leasing & Financing →