A bridge loan term sheet describes a proposed short-term financing arrangement. Read it with the project budget and exit plan in hand. Ask which provisions bind either party and which terms remain subject to underwriting.
Identify the funding party
Ask whether you are dealing with a lender or broker, who makes the final credit decision, and which entity will appear in the closing documents. Request recent comparable closing references and check applicable regulatory status for your transaction.
Compare the full economics
- Loan amount, valuation method, equity contribution, and conditions to funding
- Fixed or floating interest rate, index, floor, and interest calculation basis
- Origination points, legal and appraisal costs, exit fees, and extension fees
- Minimum interest, prepayment terms, maturity date, and default rate
Review draw and reserve rules
For construction or renovation, confirm eligible costs, required inspections, minimum draw size, turnaround expectations, and who advances cash before reimbursement. A low headline rate may not offset a draw process your project cannot support.
Check deposits and exclusivity
Ask whether any expense deposit is refundable, how it is applied, and who keeps it if the lender declines or changes terms. Review any no-shop provision with your adviser before agreeing to stop seeking other offers.
Plan for changed terms
Appraisal, title, environmental, and underwriting findings can change an initial quote. Ask which assumptions are open, request material revisions in writing, and compare the final documents with the term sheet before closing.
LendLedger's public directory preview can help build a lender shortlist. Full directory access requires an approved account. A profile or review does not replace deal-specific diligence.
Frequently asked questions
What is a bridge loan term sheet?
A term sheet outlines proposed loan terms and conditions. Binding and nonbinding provisions vary by document; read deposits, exclusivity, expenses, and approval conditions before signing.
How long does a bridge loan term sheet exclusivity period last?
There is no universal period. Read the specific no-shop clause for its duration, scope, termination conditions, and any exceptions.
What is a re-trade in bridge lending?
A re-trade is a material change to proposed terms after the initial quote. Ask what triggered the change and compare revised documents with the original proposal before deciding whether to proceed.
What LTV do bridge lenders typically allow?
Limits vary by property and lender. Ask whether the quote is based on current value, projected value, or project cost, and how much equity you must contribute.
What is the difference between a direct bridge lender and a broker?
A lender provides financing; a broker helps place the transaction. Ask who makes the final decision, funds and services the loan, and receives each fee.
What should I check about draw administration before signing?
Ask who conducts inspections, what costs qualify, whether draws have minimum amounts, and when funds are expected after approval. Get the process in writing.
How do I verify a bridge lender's track record before signing?
Request recent comparable closing references, confirm the funding entity and applicable regulatory status, and use directory reviews as additional context.