The short answer
A bridge loan is short-term money that you repay from a refinance or a sale. Hard money is a private version, usually priced higher.
Judge the cost over the months you will really hold it. Plan the exit before you sign.
On this page
- When a bridge beats a bank loan
- Hard money vs institutional bridge debt
- What closing speed really means
- The cost stack
- What public filings say about short-term cannabis debt
- Exit strategies lenders accept
- Red flags in bridge term sheets
- A worked example: nine months on a $1.5 million bridge
- Questions to ask before you sign
- Terms to know
- Frequently asked questions
When a bridge beats a bank loan
A bridge helps when timing matters more than price. A seller may need a fast close. A license may be pending.
Compare it with institutional bridge debt and mezzanine financing on the capital stack.
It costs more per month than permanent debt. Use it only when the exit is clear.
A bridge loan is a promise about your exit. The lender underwrites to the takeout.
Hard money vs institutional bridge debt
| Feature | Hard money | Institutional bridge |
|---|---|---|
| Source of funds | Private lenders | Funds and specialty lenders |
| Main focus | Collateral and speed | Property and sponsor strength |
| Typical hold | Short | Short to medium |
| Paperwork | Lighter, varies | Heavier, more formal |
Neither label guarantees a price. Compare actual term sheets.
What closing speed really means
Fast closings still depend on your file. License checks, title and environmental work take time.
Ask what separates approval from funding. Ask for a recent funded-date example.
The cost stack
Bridge Loan Cost Check
Turn a bridge quote into one all-in cost.
How to use this: Enter the quote and your real hold time. Short holds make points and fees weigh more.
* Illustrative only. Not investment advice.
What public filings say about short-term cannabis debt
Chicago Atlantic's 10-K reports a weighted average maturity of 2.2 years. It also cites significant prepayment protections.
Our worked example below annualizes to 16 percent. That lands near the 16.3 percent portfolio yield in the filing.
Treat the match as a sanity check. It is not a quote.
Exit strategies lenders accept
Name a backup exit in your plan. Lenders respect a plan B.
Red flags in bridge term sheets
- No total repayment figure.
- Fee language that stays vague after you ask.
- A pressure deadline to sign.
- Extension terms left blank.
- A lender that will not share references.
One red flag is a reason to pause. Two are a reason to walk.
A worked example: nine months on a $1.5 million bridge
These numbers are an illustration. They match the cost check above.
A lender offers $1,500,000 at 12 percent with 2 points and $15,000 of other fees. The borrower holds the loan nine months.
Interest is $135,000. Points are $30,000. Total cost is $180,000.
That is 12 percent of the loan. Annualized over nine months, it is 16 percent.
| Item | Result |
|---|---|
| Interest, 9 months | $135,000 |
| Points | $30,000 |
| Other fees | $15,000 |
| Total cost | $180,000 |
| Annualized | 16% |
Questions to ask before you sign
- What is the total cost over the months I will really hold the loan?
- What do extensions cost and who must approve them?
- What are the prepayment terms?
- What triggers a default?
- Which exit do you expect me to use?
Write the answers down. Compare them across lenders.
Terms to know
| Term | Plain meaning |
|---|---|
| Points | A fee charged as a percent of the loan. |
| Extension fee | A charge for more time at maturity. |
| Exit fee | A fee charged when you repay. |
| Interest reserve | Money set aside to pay interest. |
| Takeout loan | Permanent financing that repays a bridge. |
| Maturity | The date the loan must be repaid. |
Quick Check
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No origination fees for initial capital review. Terms depend on the deal and the lender.
Check Capital Eligibility →Frequently Asked Questions
Sources and further reading
- Chicago Atlantic Real Estate Finance, Form 10-K for fiscal year 2025 (SEC)
- Chicago Atlantic, company website
- FinCEN guidance FIN-2014-G001, BSA Expectations Regarding Marijuana-Related Businesses
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