Direct bridge lending has existed for decades, yet it is still widely misunderstood. Here are five things experienced investors know — and what the reality actually looks like.
1. "Bridge capital is only for borrowers who can't qualify anywhere else"
Experienced investors use direct bridge capital strategically — not because they have no other options, but because the speed and certainty of close creates value that outweighs the rate differential. Many of our best borrowers have pristine credit and access to conventional financing. They choose direct lending because the deal requires it.
2. "The rates are predatory"
Direct lending rates of 9%–12% are priced for short-term, asset-based transactions that require fast execution. A bridge loan is not meant to be held for 30 years. When you model the actual carrying cost over a 6–18 month hold, the premium over bank rates is typically modest relative to the deal economics.
3. "You need a high credit score"
Asset-based lenders focus primarily on the collateral, exit strategy, and the borrower's liquidity. A 620 credit score with strong equity and a clear exit can outperform a 780 credit score with weak collateral. That is fundamentally different from how banks evaluate borrowers.
4. "There's a $1M minimum"
Some direct lenders do set minimums that exclude smaller deals. Truen & Michaels lends from $100K — we have done it for 40 years. The investors who need $250K for a single-family value-add project in Queens deserve the same quality execution as someone closing a $5M multifamily deal.
5. "The process is opaque and risky"
Working with an established direct lender means your fees, terms, and timeline are transparent from the start. A term sheet should show you points, rate, prepayment structure, and maturity before you spend a dollar on due diligence. If it does not, find a different lender.