Business loans · Bridge
Business Bridge Loans: Short-Term Funding Until a Contract, Sale, SBA Loan or Receivable Comes Through
A business bridge loan covers a defined gap with a defined end: the 45 days until an SBA loan closes, the 60 days until a government contract pays, the quarter until a property sale settles, the weeks between a big order and its invoice. It is priced for speed and repaid from the event it bridges, which makes the exit the most important part of the underwriting. This guide covers what bridge loans look like in October 2026, what they cost with Prime at 7.00%, which product is actually the right bridge for each situation, and the mistakes that turn a bridge into a permanent balance.
What Is a Business Bridge Loan?
A business bridge loan is short-term financing, typically $25,000 to $5 million over one to twelve months, that funds in days and is repaid from a specific future event: a loan closing, a receivable, a contract payment, an asset sale or a capital raise. In practice it comes in four forms: a short term loan or revenue-based advance (fastest, 24 to 72 hours, factor 1.10 to 1.30 or 10% to 30% APR); a line of credit drawn for the gap (cheapest if already open, 1.5% to 3% per draw); invoice or contract financing against the receivable that will repay it (1% to 4% per 30 days); and, for real estate, a hard money or commercial bridge loan at 9% to 13% with points. Lenders underwrite the exit first: a signed SBA commitment letter, an executed contract with a creditworthy payer, a purchase agreement. With a documented exit, bridge funding is available to businesses with credit from about 550 and a year of history (sometimes six months); without one, it is just an expensive short-term loan. Through RAN Funding, one application returns the bridge products your file qualifies for, matched to the exit.
Common Bridge Situations and the Right Product for Each
| Gap | Typical length | Best bridge product | Cost at Prime 7.00% | Exit documentation |
|---|---|---|---|---|
| SBA loan approved, not yet closed | 30 – 60 days | Short term loan or line; SBA lender may object to new debt, so confirm first | 10% – 25% APR; 2% – 3% per draw | SBA commitment letter |
| Government or large contract awarded, paid in 60 – 90 days | 60 – 120 days | Contract financing, invoice factoring once invoiced, or a term advance | 1% – 4% per 30 days; factor 1.12 – 1.25 | Executed contract, PO, invoice |
| Large order to fill | 45 – 90 days | PO financing plus factoring | 1.5% – 4% per 30 days | Confirmed PO |
| Property or business sale pending | 30 – 180 days | Short term loan; real estate bridge if secured by the property | 10% – 25% APR; 9% – 13% plus points | Purchase agreement |
| Insurance claim or legal settlement pending | 30 – 180 days | Short term loan or line | 10% – 30% APR | Claim acknowledgment, settlement terms |
| Seasonal trough before peak | 60 – 120 days | Line of credit or revenue-based advance | 2% – 3% per draw; factor 1.15 – 1.30 | Prior-year receipts |
| Equity raise or investor funding in progress | 60 – 180 days | Short term loan; venture debt for funded startups | 12% – 30% APR | Term sheet, subscription docs |
Contract and order bridges in detail: contract bridge funding, funding for a large order, purchase order financing.
What a Bridge Costs
| $150,000 bridge, 60 days | Product | Pricing | Cost of the bridge |
|---|---|---|---|
| Existing line of credit | Draw at 2% fee | 2% per draw | $3,000 |
| Bank line at Prime + 2 | Interest only | 9.00% | $2,250 |
| Short term loan | 12-month term, paid off at 60 days with interest waived | 20% APR | $5,000 |
| Short term loan | 12-month term, full interest owed on early payoff | 20% APR | $16,700 |
| Revenue-based advance | Factor 1.15, 4-month term | Factor | $22,500 |
| Invoice factoring | Against the receivable that repays it | 2% per 30 days | $6,000 |
| Real estate bridge | Secured by property | 11% + 2 points | $5,750 |
Cost of bridging $150,000 for 60 days, by product
The prepayment term decides the cost of a bridge more than the rate does. Ask whether early payoff saves interest before you sign.
Convert any quote with the factor rate calculator.
How Lenders Underwrite a Bridge
- The exit first: a commitment letter, executed contract, purchase agreement or term sheet with a date and a creditworthy counterparty. The stronger the exit, the lower the price and the weaker the credit a lender will accept.
- The fallback second: if the exit slips 30 days, can deposits carry the payment? Lenders size to the fallback.
- Existing debt: an SBA lender or bank about to close may prohibit new debt; get written consent or structure the bridge to be repaid at closing from proceeds.
- Credit and history: from about 550 and six months on revenue-based bridges with a strong exit; 600 to 650 for short term loans and lines.
- Documents: three months of statements, the exit documents, a voided check, ID.
Share of applicants fully approved, by product (Federal Reserve, 2026)
81% of applicants were approved for at least part of the request. Source: Federal Reserve Banks, 2026 Report on Employer Firms.
Mistakes That Turn a Bridge Into a Permanent Balance
- No written exit. A verbal “the contract is coming” is a loan without a bridge.
- Full-interest prepayment. A 12-month loan with no early-payoff benefit charges you for ten months you did not use.
- Bridging a permanent gap. If the business loses money every month, the event will not repay the loan; the fix is a term loan sized to the problem or a cost change, not a bridge.
- Taking the bridge from the lender you are bridging to without consent; most SBA and bank closings require no new debt.
- Sizing to the maximum offered rather than the gap; borrow the gap plus a 10% to 15% cushion for slippage.
Common Questions
How does a business bridge loan work?
A lender advances $25,000 to $5 million for one to twelve months against a documented future event (a loan closing, contract payment, sale or receivable), funded in days; the event’s proceeds repay the loan. The exit is underwritten first, which is why a signed commitment letter or contract matters more than your credit score.
Can I get a bridge loan while waiting for an SBA loan to close?
Often, but check with the SBA lender first: most require no new debt before closing, and some will consent to a short bridge repaid from loan proceeds. A line of credit already open, or an advance repaid at closing with the lender’s written consent, are the usual structures.
What credit score do I need for a business bridge loan?
About 550 for a revenue-based bridge with a strong documented exit, 600 to 650 for a short term loan or line, 680+ for a bank line or real estate bridge. The exit documentation can offset a weaker score.
How fast can a business bridge loan fund?
Twenty-four to 72 hours for revenue-based and short term loan bridges on a complete file, one to three days for an online line, three to seven days for factoring or contract financing on a new receivable, and one to three weeks for a real estate bridge.
Is a bridge loan the same as a hard money loan?
A hard money loan is one kind of bridge, secured by real estate and priced at 9% to 13% plus points. Most business bridges are unsecured short term loans, lines, revenue-based advances or receivable financing, chosen by the exit rather than by property.
Is RAN Funding a lender?
No. RAN Funding is a business financing broker. We present your application to our lender network and show you the offers you qualify for; the funding partner sets the approval, amount, rate, fees and terms.
Sources
- 2026 Report on Employer Firms: Findings from the 2025 Small Business Credit Survey — Federal Reserve Banks
- H.15 Selected Interest Rates (bank prime loan rate 7.00%) — Board of Governors of the Federal Reserve System
- Commercial bridge and hard money loan pricing (2026) — Bankrate
See What You Qualify For
One application, about five minutes, soft pull only. A funding specialist tells you up front which products fit your file, what they cost and how fast each one funds.
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