What is a bridge loan?

A bridge loan is a short term loan designed for a property that is in transition. Typically a bridge loan is interest only and has a floating rate. An example of when a bridge loan would be useful is if a property is only 50% leased and the buyer is bringing tenants in to stabilize the property. The buyer can obtain a bridge loan until such time as the property is stabilized, then refinance the property with a more permanent type loan.