Updated November 10, 2026
Quick answer
Small balance commercial bridge loans, commonly loans of a few million dollars or less, come mostly from local and regional banks, private lenders and smaller debt funds, since many large funds set minimum loan sizes above that. Pricing typically sits in the same 9-14% range with 1-4 points, often at the higher end because fixed costs weigh more on a small loan, and recourse is more common. Typical ranges, not a quote; Axiant Partners, a business-loan broker in Boca Raton, compares bridge lenders.
What Counts as Small Balance
There's no official cutoff. Lenders commonly use "small balance" for commercial real estate loans of a few million dollars or less, and some programs draw the line at $5 million or another round number. What matters for you is that the lender pool changes as the loan gets smaller: some of the bigger bridge lenders don't quote below their minimum, and the ones that do often price and structure the loan differently.
The general mechanics don't change. A bridge loan is short-term, usually interest-only, and repaid by a sale or a permanent loan. For the basics, see commercial bridge loans.
Who Makes Small Balance Bridge Loans
| Lender type | Usually fits | Watch for |
|---|---|---|
| Local or regional bank | Borrowers with a banking relationship and a clear exit | Full recourse, slower approval, deposit requests |
| Private or hard money lender | Speed, a property that needs work, thinner files | Higher rates and points, short terms, extension fees |
| Smaller debt fund | Value-add business plans with a lease-up story | Minimum loan sizes, reserves, exit fees |
| Credit union | Members with owner-occupied or local investment property | Lending caps and membership rules |
Banks follow the interagency real estate lending standards, which set supervisory loan-to-value limits by property type (12 CFR Part 34, Subpart D). In practice most bridge lenders lend below those limits, commonly 60-75% of value.
Why Small Bridge Loans Can Cost More
Rates and points on small loans typically fall in the same ranges published on our 2026 bridge rates page, but often toward the top, for two reasons:
- Fixed costs. Appraisal, environmental report, title and legal cost about the same on a small loan as on a larger one, so they're a bigger share of the loan. If $8,000 of reports is about 0.53% of a $1,500,000 loan, the same reports are 0.1% of $8,000,000.
- Minimum fees. Some lenders charge a minimum origination or exit fee in dollars, which works out to more points on a small loan.
Compare offers on total cost for the months you'll actually hold the loan, not on the rate alone.
Worked Example: A $1.5 Million Bridge Loan
Illustrative, not a quote. An investor buys a $2,000,000 small retail building that is half vacant and borrows 75%, or $1,500,000, interest-only for 12 months at 11% with 2 points. Assume $8,000 of third-party reports.
| Cost | About |
|---|---|
| Monthly interest | $13,750 |
| Interest for 12 months | $165,000 |
| Points (2%) | $30,000 |
| Third-party reports (assumed) | $8,000 |
| Total for 12 months | $203,000 |
That's about 13.5% of the loan for one year, before any extension fee. The rate, points and LTV sit inside the typical ranges above. If lease-up takes longer and the loan needs a six-month extension, add another $82,500 of interest plus whatever extension fee the lender charges, which is why the exit plan matters more than a quarter point of rate.
Recourse and Guarantees
On larger institutional bridge loans, non-recourse terms with carve-outs are common. On small balance loans, a full or partial personal guarantee is more common, especially from banks. Ask whether the guarantee burns off when the property hits an occupancy or income target, and what triggers recourse. Our bridge loan pitfalls guide covers the terms that cause trouble at maturity.
Exits That Fit Small Properties
- Bank permanent loan once the property is leased and the income supports the payment.
- SBA 504 or 7(a) if your business will occupy the building: SBA requires owner occupancy of at least 51% of an existing building. See the SBA 504 amortization schedule for how that loan pays down.
- Agency small-loan programs for apartment buildings with five or more units. Their size limits and terms change, so confirm the current program with a lender before you count on it.
- Sale after the value-add work is done.
Get a soft read on the exit loan before you close the bridge. If the takeout lender won't lend enough at the stabilized value, the bridge will have to be paid down or extended. See refinancing into permanent financing.
How to Shop a Small Balance Bridge Loan
- Ask the minimum loan size first. It saves a week with a lender that won't quote.
- Get total cost in writing. Rate, points, minimum fees, exit fee, extension terms and third-party costs.
- Clarify the guarantee. Full, partial or carve-out only, and whether it burns off.
- Match the term to the plan. Lease-up or renovation time plus the time to close the exit loan.
- Line up the exit. A soft quote from the bank, SBA lender or agency lender you plan to refinance with.
Get matched with bridge lenders that take loans your size, or call (561) 268-0465. Approval and terms are up to the lender.
Frequently Asked Questions
What is a small balance commercial bridge loan?
A short-term, usually interest-only commercial real estate loan of a few million dollars or less, used to buy, reposition or refinance a property until it can be sold or moved to permanent financing. There's no official cutoff for small balance.
Who makes small balance bridge loans?
Mostly local and regional banks, private and hard money lenders, smaller debt funds and some credit unions. Many large bridge lenders set minimum loan sizes above that range.
What are typical rates on a small balance bridge loan?
Typically within the general 9-14% range with 1-4 points, often toward the higher end because fixed costs and minimum fees weigh more on a small loan. Terms commonly run 6-36 months.
Are small balance bridge loans recourse?
Often, yes. A full or partial personal guarantee is more common on small loans than on larger institutional bridge loans, especially from banks.
How much can I borrow on a small bridge loan?
Commonly 60-75% of the property's value, depending on the property, the business plan and the lender.
Sources & Further Reading
- 12 CFR Part 34, Subpart D: Real Estate Lending Standards — The interagency real estate lending standards, including supervisory loan-to-value limits for banks.
- 13 CFR 120.131: Leasing part of new or existing property — The 51% occupancy rule for existing buildings and 60% for new construction.
- SBA 504 Loans — Fixed-rate financing for real estate and long-term equipment through Certified Development Companies.
- SBA 7(a) Loans — Program overview and the $5 million maximum loan amount.
Figures above describe ranges commonly seen across lenders and reflect published guidance as of the date on this page. Confirm current terms with the cited source or your lender before acting.