Bank bridge wins at lower leverage (60% to 70% LTC) with strong sponsor relationship and recourse acceptance, typically 100 to 200 bps cheaper than debt fund . Debt fund bridge wins at higher leverage (70% to 80%), non-recourse , and faster term sheets. Quote both when in the overlap zone.
Side-by-side at a glance
| Dimension | Bank bridge | Debt fund bridge |
|---|---|---|
| Typical loan size | $5M to $50M | $10M to $200M+ |
| Leverage | 60% to 70% LTC | 70% to 80% LTC |
| Origination | 0.5% to 1.0% | 1.0% to 2.0% |
| Exit fee | Rare | Common (0.25% to 1.0%) |
| Recourse | Often partial; sometimes non-recourse | Non-recourse with bad-boy carve-outs |
| Term sheet speed | 10 to 21 days | 5 to 14 days |
| Closing speed | 45 to 75 days | 30 to 60 days |
| Decision-maker access | Through relationship banker → credit committee | Direct to fund's credit committee |
| Sizing flexibility | Standardized | Willingness to size to forward NOI |
When to consider bank bridge
Strong existing bank relationship with depository balances and prior business. The relationship banker champions the deal; the bank's pricing reflects total relationship economics, not just standalone loan economics.
Lower-leverage requests (60% to 70% LTC) where the bank's credit box is satisfied at competitive pricing.
Recourse-acceptable deals. Bank bridge is materially cheaper when recourse (partial or full) is on the table.
Smaller-balance bridge ($5M to $25M) where the bank's commitment range is naturally fit.
When to consider debt fund bridge
Higher-leverage requests (70% to 80% LTC) where banks won't go.
Non-recourse with bad-boy carve-outs only. Banks rarely offer fully non-recourse on bridge below institutional sponsor and lower-leverage thresholds.
Larger-balance bridge ($25M+) where the debt fund's balance-sheet flexibility produces a structure tailored to the deal.
Speed-sensitive transactions. Debt funds quote in days; banks quote in weeks. Closing is 15 to 30 days faster for typical debt fund execution.
Asset classes or sponsor profiles outside the bank's credit box (first-time sponsor, transitional hospitality, single-family rental portfolios, niche commercial).
Pricing math worked out
24-month carry difference: bank ~$3.5M total interest + $200K fees = $3.7M. Debt fund ~$3.85M total interest + $250K fees = $4.1M. Difference: ~$400K over 24 months.
Worth it for the borrower if non-recourse and faster execution are critical. Not worth it if recourse and speed don't matter and the bank relationship is real.
Frequently asked questions
Are bank bridge loans still available in 2026?
Yes, though more selectively than 2020 to 2022 per Fed SLOOS data. Banks with strong existing relationships and lower-leverage / recourse-acceptable deals remain active. Higher-leverage / non-recourse bridge has consolidated to debt funds.
Can I get a non-recourse bank bridge?
Sometimes, on stabilized properties at moderate leverage with institutional sponsors. Common for repeat customers of national or super-regional banks. Less common at smaller community banks.
How fast can a debt fund actually close?
30 to 45 days from signed term sheet on typical bridge with all third-party reports in process from term sheet day. Construction debt fund closings run 60 to 90 days.
Sources
- Senior Loan Officer Opinion Survey on Bank Lending Practices (SLOOS) · Board of Governors of the Federal Reserve System · 2026-Q1
- Quarterly Survey of Commercial/Multifamily Mortgage Bankers Originations · Mortgage Bankers Association · 2026-Q1
- Financial Stability Report · Board of Governors of the Federal Reserve System · 2025-11