Mat Piro, SVS Finance, Inc. · DRE #00981187
Most sponsors shop a bridge loan on one number. That is the number that matters least.
Ask ten borrowers what they want from a bridge loan and nine will answer with a rate. It is the easiest thing to compare, so it is the one thing everyone compares.
But a bridge loan is not just a rate. It is six moving parts. Five of them are negotiable, most borrowers never negotiate them, and any one of them can cost more than the rate does.
Here is what is actually in the loan.
1. Speed and Certainty of Execution
Speed and execution are the whole reason bridge debt exists. If you had ninety days you would go to a bank.
And oftentimes these days, lenders who pass themselves off as private money or hard money are actually just mortgage bankers following secondary market loan guidelines. These mortgage bankers fund their loans on their own credit lines and then have to sell those loans to a buyer in the secondary mortgage market (usually a large Wall Street hedge fund), in order to pay off their credit lines so they can make more loans. In some cases, their loan approval requires a second signature approval from their secondary market buyer.
What most people do not know is where the ninety days goes. It is not underwriting. It is the appraisal and other third party reports, as well as who orders that report and their process for ordering. Then the review of that appraisal and those reports, then layers of reviews of the full file, then credit committee.
A typical bank credit committee has five to seven or more members, each with different influence inside the bank. That is a lot of people who all have to agree to move forward.
Most of the mortgage banking lenders have to follow a set system for ordering their appraisals from a third party appraisal service. All of these steps eat up more time, pushing your closing date farther and farther away.
The bridge lenders we go to first do not need to sell their loans, and they do not order third party appraisals at all. They simply do not trust them. They run their own in-house valuation, or they will work from a local broker’s BPO based on property type and location.
Their money is their own. It is either their own debt fund, where they are the final decision makers, or a group of high-net-worth check writers who wire the loan amount on the day of funding. Final decision making generally sits with one or two key figures, or with a single check writer.
Take the appraisal and the secondary market out of the loop and the clock changes completely. We place quick-close bridge loans that fund in five to seven business days. On the right file, it can be faster than that.
What to ask
- Do you require a third party appraisal, or will you use an in-house valuation or a BPO?
- Do you sell your loans? If so, who buys them? Is it a Wall Street firm?
- If an appraisal is required, who orders it, and does it have to go through a service?
2. Recourse
This is the one that keeps sponsors awake, and it is far more flexible than people assume.
A full recourse loan potentially puts your personal assets on the hook for the debt. Plenty of borrowers sign one because nobody told them there was a choice. Nearly all the mortgage bankers we know of require a personal guarantee.
There is a choice. Many of our bridge lenders do not require a personal guarantee at all. Others will structure something in between:
- Non-recourse. No personal guarantee.
- Partial recourse. A guarantee capped at a percentage of the loan, or burning off as the project hits milestones.
- Corporate guarantee. The borrowing entity stands behind the loan. The sponsor does not.
- Full recourse. Usually priced better. Sometimes that trade is worth making, and it should be a decision rather than a default.
3. Prepayment
The quiet one. A bridge loan is temporary by definition, so the terms that govern getting out of it matter as much as the terms for getting in.
Watch for minimum interest periods, guaranteed months, and exit fees. A loan that looks cheap at nine percent is not cheap if it carries six or more months of guaranteed interest and you refinance in month three or four.
Low or no prepayment penalties are available. On the quick-close programs we place, no prepay is standard.
Run this math
Take the rate, the points in, any exit fee, and any guaranteed interest. Divide by the months you actually expect to hold it. That is your real cost of capital, and it frequently ranks the term sheets very differently than the rate did.
4. Documentation
Borrowers who have been through a bank, or often a mortgage banking process, brace for the same ordeal. It is not the same.
A bridge lender underwrites the property first and the sponsor second. For most files, that means:
- Personal financial statement
- Credit report
- Property financials, meaning operating statements or a P&L, and a rent roll
- Entity documents
That is usually the list. No tax returns. No twelve months of bank statements. No debt service coverage test on your personal income.
It is low documentation, not no documentation, and the distinction is worth keeping.
5. Leverage and Collateral
Here is where experienced sponsors leave the most on the table.
If the subject property will not carry the leverage you need, the loan does not have to stop at the subject property. Lendable equity in another asset you already own can be crossed in as additional collateral.
That does two things:
- It raises the proceeds available on a deal that would otherwise be short.
- On an acquisition, it can take leverage past 100% of the purchase price, which means buying the new asset without writing a down payment check.
The cash you were going to put down stays in your pocket for construction, renovation or carry. That is not a loophole. It is ordinary cross-collateralization, and it is available more often than sponsors expect. Some of our bridge lenders can cross into a second position, while others will only cross into first position.
Piggyback second mortgages are another way to grow leverage and proceeds above a first mortgage that taps out at a lower LTV. We work with many private second mortgage lenders who have their own funds and who like writing these smaller second loan amounts to make a deal work.
6. Price
Last, because it should be read last.
Price is a rate, plus points in, plus any exit fee. Compare all three or you are not comparing anything. And read price against the other five components, because every one of them trades against it. Non-recourse usually costs something. So does speed. So does leverage above the comfortable line.
So what does the best version look like?
When all six line up, the loan looks like this:
- Funds in under ten business days
- No third party appraisal
- Non-recourse, with no personal guarantee
- Low or no prepayment penalty
- Low documentation, no tax returns, no bank statements
- Structured so the cash stays with you rather than going into a down payment
That combination is real. We place it. It is also not automatic, and any broker who tells you it is has not read your file yet.
Out of the several hundred lenders we track, only a small number will deliver all six on the same loan. Not four of the six. All six. Those lenders exist, we place with them, and they are rarely the ones a borrower turns up on their own, because the ones who advertise hardest are usually the ones who have to sell the loan afterwards. Knowing who they are, what they are funding this quarter, and which of them will say yes to your property type is the actual work. It is also the reason a bridge loan is worth shopping properly instead of taking the first term sheet that arrives.
Before your next bridge loan
Ask the six questions in order. Speed, recourse, prepay, documents, collateral, price. Get the answers in writing. Then compare term sheets on the total cost across the months you will actually hold the loan, not on the headline rate.
If you want the longer version of the thinking behind this, the five points that surprise experienced sponsors most are in our free guide, 5 Bridge Loan Secrets That Change Everything.
And if you have a file in front of you right now, send it over. We arrange commercial bridge loans, multifamily bridge loans, industrial property bridge loans and retail shopping property bridge loans across California and nationwide, from quick-close private money through to large balance debt fund executions, including hotel bridge and term loans, as well as the harder property types most lenders pass on.
Reach Mat Piro at mat@svsfinance.com or 408.430.3491.
About the author
Mat Piro is the founder of SVS Finance, Inc., a commercial mortgage and advisory firm in Los Gatos, California. His real estate career began in 1986 and he has been licensed since February 1988. He has closed over $1.8 billion in loan transactions. SVS arranges bridge, construction, term and structured financing nationwide for sponsors and third party originators, and is licensed under the California Department of Real Estate, Corp. Broker #02007514.
Mat Piro · DRE #00981187 · mat@svsfinance.com · 408.430.3491
Rates, terms and structures described here are indicative of the market as of September 2026, vary by lender, property and sponsor, and are subject to change without notice. This is not a commitment to lend.