When a commercial opportunity is time-sensitive, conventional financing is often too slow. Two faster options come up again and again: the bridge loan and the hard money loan. They sound interchangeable, and they do overlap, but choosing the wrong one can cost you in rate, terms, or a blown deadline. Here’s how to tell them apart and pick the right tool.
What a bridge loan actually is
A bridge loan is short-term financing that “bridges” a gap — typically the window between buying a new property and selling or refinancing an existing one. Terms usually run six months to three years. Because bridge loans are often offered by banks and institutional lenders, approval leans on the property’s income potential and your overall financial picture, and pricing tends to sit below hard money.
What a hard money loan actually is
A hard money loan is asset-based: the lender underwrites primarily on the value of the collateral rather than your credit score or income history. That makes it the go-to when you need speed or when the deal or borrower doesn’t fit a bank’s box — a fix-and-flip, a distressed property, or a borrower with a complex tax return. In the Los Angeles market, hard money commercial rates commonly fall in the range of roughly 8-12% for a first-position loan, with faster closings as the trade-off for higher cost. (Rates move with the market — treat this as a ballpark, not a quote.)
The practical differences
- Speed: Hard money is usually fastest — days, not weeks. Bridge loans are quick but often involve more documentation.
- Cost: Bridge loans generally price lower; hard money charges a premium for speed and flexibility.
- Underwriting: Bridge weighs your finances and the property; hard money weighs the asset first.
- Best fit: Bridge for a clean transition between two properties; hard money for distressed, unconventional, or ultra-fast deals.
How to decide
Ask two questions: How fast do I need to close, and how clean is the file? If you have time and strong financials, a bridge loan usually wins on cost. If the clock is the constraint or the deal is unconventional, hard money buys you certainty and speed. Many investors use hard money to win the deal, then refinance into cheaper long-term financing once the property stabilizes.
Not sure which one you need?
That’s exactly what a broker is for. At Oakridge Capital Advisors we shop both options across our lender network, compare the true all-in cost, and match the structure to your timeline — so you’re not guessing. Call us at (818) 217-1217 or book a free consultation to talk through your deal.
