What is bridge financing?
Bridge financing—also known as a bridge loan—is a short-term lending solution designed to provide immediate access to funds when you’re between major financial transactions or facing a temporary gap in financing. These loans are typically repaid within a year and, because of their short-term nature, often carry higher interest rates than traditional mortgages or loans.
When a bridge loan may be right for you:
- You need to access equity from your current home to make a down payment on a new property.
- You’ve started a new job and won’t qualify for a traditional mortgage for a few months.
- You need to cover a CRA reassessment.
- You’re consolidating or paying off a large debt.
- Your property has been damaged and you need repair funds quickly.
- You’ve experienced a job loss and require short-term assistance until new employment begins.
- You want to upgrade or renovate a new home before moving in.
Bridge loans can provide the flexibility and speed traditional lenders can’t always offer—helping you move forward with confidence while you secure longer-term financing.
About bridge loans:
A bridge loan provides short-term financing with quick access to capital, making it useful for covering gaps between transactions, funding new ventures, or handling unexpected expenses.
Approval is primarily based on equity—which can include cash, investments, or property—along with your credit history and current financial situation. Because they are considered higher risk, bridge loans generally carry higher interest rates than traditional loans, and lenders may charge additional fees such as administrative or appraisal fees (outlined in your offer). While terms, costs, and conditions vary, your mortgage broker can help you compare and choose the right option.
Key features:
- Quick access to capital
- Easier to obtain than traditional loans
- Reduced fees for loans under 60 days
- No early payout penalties in most provinces
- Flexible uses (business, personal, or transitional needs)
- Minimal documentation in many cases
Considerations:
- Short-term in nature—an exit strategy is essential
- Higher interest rates than traditional loans
- May require repayment quickly, which can be challenging if cash flow is tight
If you are confident in your ability to repay and need short-term financing, a bridge loan can be an effective tool. The goal is to repay as soon as possible to minimize overall costs.
Frequently Asked Questions for BRIDGING LOANS
How do I get a bridge loan?
We offer bridge financing for individuals who need money quickly but don’t meet the requirements of traditional lenders. If you live in Atlantic Canada or Ontario, you may be eligible. We work with hundreds of brokers throughout Atlantic Canada and Ontario, contact us for broker recommendations near you so they can evaluate if a bridge loan is right for you!
How much can I borrow with a bridge loan?
The amount you can borrow with a bridge loan will depend on your equity and credit history. We also consider your current financial situation when determining the amount you are eligible to borrow.
What are the repayment terms for a bridge loan?
Bridge loans typically have shorter repayment terms than traditional loans. This is because they are designed to be paid back quickly, usually within a year.
What happens if I can't repay my bridge loan?
If you are unable to repay your bridge loan, you may be required to sell your collateral to repay the debt. This could put you at risk of losing your home or other assets. Before taking out a bridge loan, be sure to consider all of the potential risks and disadvantages.
Are there alternatives to bridge financing?
A loan like a line of credit for gap funding would be ideal, but banks will often not approve many clients once a new debt has surfaced.
- Personal loans can be used for a variety of purposes; however, they typically have shorter repayment terms and higher interest rates than bridge loans.
- A home equity loan is less expensive, but a bridge loan could be more flexible in certain situations (for example, traditional lenders may not offer home equity loans if you are in the process of selling your house).
If you are facing a financial emergency and need money quickly, bridge financing may be the right solution for you. We can help you get the funds you need to get through this difficult time.