Short-term financing (typically under three years) used to acquire, stabilise, or reposition an asset until permanent financing or a sale is arranged; priced higher than long-term debt.
Related terms
- Capital adequacy
A regulatory measure of whether a bank or lender holds enough capital against its risk-weighted assets to absorb losses; tighter rules directly affect real est…
- Capital stack
The layered structure of financing in a deal, from senior debt at the bottom to equity at the top.
- Cash sweep
A covenant directing surplus cash flow to accelerate loan repayment rather than distribute it to equity, common in bridge and construction facilities to de-ris…
- Construction loan
A loan drawn down in stages against verified progress to fund development, usually interest-only during the build and repaid or refinanced on completion.
- Cost of capital
The blended required return on the debt and equity funding an investment.
- Covenant
A condition in a loan agreement the borrower must maintain, such as a minimum DSCR.
- Credit facility
A pre-agreed line of financing a borrower can draw on up to a set limit over a defined period, revolving or term, rather than a single lump-sum loan.
- Debt service coverage ratio (DSCR)
NOI divided by debt service; measures the cushion for repaying a loan.