When the bank says no: how bridge lending works

A bank decline is not a verdict on your building. Banks in 2026 are built — by regulation and by choice — for stabilized properties, lower leverage, and simple structures. Everything outside that box has moved to a second market, and that market is now large: per CBRE data cited by Origin Investments, alternative lenders closed 40% of non-agency commercial real estate loans in the fourth quarter of 2025, up from 23% a year earlier.

What private lenders finance

The deals banks pass on for reasons that have nothing to do with the real estate failing: a building mid-lease-up, a vacancy being fixed, a purchase that must close in five weeks, a renovation between the old income and the new income, a borrower whose tax returns are complicated even though the property performs. The product set runs from bridge and transitional first mortgages to mezzanine debt and preferred equity layered behind a bank loan.

What it costs, and what you get

Expect a floating rate — SOFR plus a spread — on a two-to-three-year term, at 65% to 70% of value, underwritten to the building's in-place cash flow. Pricing lands well above a bank loan; that is the price of the two things banks cannot sell you: speed (30 to 45 days to close, against 60 to 90 at a bank) and tolerance for a property in motion.

The leverage discipline is worth noticing: today's bridge lenders are at 65–70% LTV where earlier cycles ran 75–80%. A bridge loan in 2026 is conservative money moving fast, not desperate money.

The exit decides the loan

A bridge loan is a two-year answer, so the question that matters is what happens at the end: the stabilized refinance into a bank loan, or the sale. If the exit math does not work on paper before you borrow, the bridge is not a bridge. Any honest broker or lender will make you show the exit first.

Where we fit

We are a commercial finance broker in Massachusetts. The registry record says the state's everyday commercial lending runs through community banks — and that is where a clean file should go first, because bank money is the cheapest money. But we also track the private-credit side for the files banks decline and the timelines banks cannot meet. One application; whichever market actually fits it.

Source: Origin Investments, How Private Lenders Are Reshaping Commercial Real Estate Financing (CBRE and Mortgage Bankers Association data cited therein).