What is a bridge loan?

A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing. It is usually called a bridging loan in the United Kingdom, also known as a “caveat loan,” and also known in some applications as a swing loan.

Bridge loans can be used for residential or commercial real estate. The borrower may be a real estate investor or a homeowner buying a new home.