When you’re trying to secure fast capital—whether to buy another property, fund a business opportunity, or free up cash while waiting for a sale—you’ll quickly run into two popular options: bridge loans and HELOCs. Both can unlock the equity in your property, but they function very differently, and choosing the wrong one can cost you time, money, and opportunities.
This guide breaks down exactly how these two financing tools work, their pros and cons, and which option makes sense for your needs—especially if you’re someone who can’t qualify for traditional loans easily because of credit challenges, income documentation issues, or urgent funding needs.
What Is a Bridge Loan?
A bridge loan is a short-term financing tool designed to “bridge the gap” between where you are now and where you need to be—most commonly between buying a new property and selling your current one. Unlike traditional financing, bridge loans prioritize speed, flexibility, and asset-based approvals, making them ideal for people with credit issues, investors who need urgent capital, LLCs, businesses, and anyone who doesn’t have the time or financial profile banks demand.
Bridge loans are typically interest-only with a balloon payment at the end, which makes them easier to manage month-to-month. They often close in as little as 1–2 weeks, even when traditional banks take 45+ days. This makes them especially valuable to borrowers who are competing in hot real estate markets, facing deadlines, or navigating urgent financial needs.
Instead of focusing heavily on your tax returns, W-2s, or high credit scores, bridge lenders primarily look at the value of the property and your exit strategy—not your long-term income stability. That’s why this loan is so commonly used by families upgrading homes, investors who need to move fast, and small businesses that require immediate liquidity.
What Is a HELOC (Home Equity Line of Credit)?
A HELOC, or Home Equity Line of Credit, is a revolving credit line secured against your home’s equity. Unlike bridge loans, HELOCs function more like a credit card backed by your house: you can draw funds as needed, pay them down, and draw again during the “draw period.”
HELOCs are popular with borrowers who have strong credit, steady income, and time to go through a lengthy approval process. Banks examine your income history, credit score (usually 680+), DTI ratios, and employment stability. This makes HELOCs less accessible for investors, self-employed borrowers, or anyone who doesn’t meet strict underwriting requirements.
While HELOCs typically offer lower interest rates than bridge loans, they come with variable rates, making payments unpredictable. They also take weeks to months to close, which presents a major problem for buyers who need funds quickly—for example, to secure a new home before selling their current one.
Bridge Loan vs HELOC vs Home Equity Loan: Complete Breakdown
Before diving into specific comparisons, it’s important to understand how these three financing tools differ at their core. The following breakdown highlights the unique role each option plays—and how those differences affect borrowers who need fast, flexible access to equity.
| Feature | HELOC | Bridge Loan |
| Interest Rate | Usually variable | Varies by lender (commonly 10%–13%) |
| Typical Term | 10-year draw period + 10–20-year repayment period | 6–24 months |
| Approval Time | 3–6+ weeks | 48–72 hours |
| Required Credit Score | 680–720+ | Flexible/asset-based |
| Approval Focus | Income, credit score, DTI ratios, employment history | Property value + exit strategy |
| Repayment | Interest-only during draw period, then amortizing payments | Interest-only + balloon |
| Funding Speed | Often several weeks after approval | 7–14 days |
| Use Cases | Renovations, flexible cash access | Buying before selling, urgent capital needs, investment opportunities, cash flow gaps, business liquidity |
Bridge Loan vs. HELOC
A bridge loan and a HELOC both tap into your home’s equity, but their structure, speed, and purpose are fundamentally different. A bridge loan is built for immediacy—fast funding, flexible underwriting, and short-term use. A HELOC is built for long-term, revolving access to funds but comes with slower approval times and stricter qualifications. Bridge loans focus on property value and the viability of your exit strategy; HELOCs focus on your income, creditworthiness, and long-term financial stability.
Investors, people with lower credit scores, self-employed borrowers, and anyone facing tight deadlines often find that HELOCs simply can’t move fast enough. HELOC underwriting also requires a deep dive into your credit report, income history, and employment documentation. Bridge loans are the opposite: the property carries more weight than your paperwork.
Bridge Loan vs. Home Equity Loan
A home equity loan is different from a HELOC because it’s an installment loan—one lump sum with a fixed interest rate and fixed monthly payments. Unlike bridge loans, home equity loans require full underwriting, stable income, and strong credit. They also take significantly longer to get approved.
Bridge loans serve borrowers who need temporary, fast, and flexible capital. Home equity loans serve borrowers who want long-term, fixed, predictable installment financing. This means that people who can’t qualify for home equity loans—such as those with inconsistent income, lower credit, or urgent timelines—tend to choose bridge loans instead.
HELOC vs. Home Equity Loan
HELOCs offer flexible borrowing and repayments through a revolving credit line, while home equity loans operate like traditional loans with a fixed schedule. A HELOC lets you borrow only what you need as you go, whereas a home equity loan gives you all the funds upfront.
Both have strict underwriting, require strong credit scores, and take weeks to process—making them less accessible to borrowers seeking quick capital or facing credit/documentation challenges. The key difference lies in flexibility: HELOCs are more versatile, but home equity loans offer predictable payments.
Bridge Loan vs. Second Mortgage
A second mortgage allows you to borrow against remaining equity, but because it sits behind the first mortgage, lenders apply stricter LTV requirements, deep income verification, and longer processing times. This makes second mortgages difficult to obtain for borrowers with credit issues, unconventional income, or time-sensitive needs.
Bridge loans are often preferable to second mortgages because they close faster, require fewer documents, and don’t rely on your long-term financial qualifications. If you’re trying to buy another property before selling, a second mortgage may not release enough equity or may take too long to approve.
Bridge Loan vs. Line of Credit
Lines of credit—whether personal or business—offer revolving access to funds, but they come with strict credit and income requirements. Personal lines of credit are usually unsecured and limited to low amounts. Business lines of credit require strong revenue, financials, and credit history.
Bridge loans offer far higher loan amounts because they’re tied to property value, not personal creditworthiness. They’re also structured to close much faster, making them ideal for real estate transactions and urgent capital needs.
Can I Use a HELOC as a Bridge Loan?
Technically, yes—you can use HELOC funds to help finance the purchase of a new property, cover a down payment, or provide temporary liquidity. But practically, it often doesn’t work as smoothly as people hope.
HELOCs are not designed for rapid access during urgent situations. The approval process is long, documentation-heavy, and dependent on strong credit. HELOCs also come with variable interest rates, meaning you could face sudden payment increases while trying to manage two properties at once.
Some of the major downsides of using a HELOC as a bridge loan are:
- HELOCs take too long to approve to support urgent purchases or time-sensitive transactions.
- Banks require strict documentation (tax returns, income verification, high credit scores), which many borrowers can’t provide quickly.
- Banks reserve the right to freeze or reduce your credit line, especially during market volatility or if your credit changes.
- Many lenders won’t allow HELOC funds to be used for investment property purchases or down payments, limiting flexibility.
- HELOC limits may not release enough liquidity for large purchases, especially for investors or LLCs needing higher capital.
- HELOC underwriting focuses on your long-term financial stability, not just the asset, which makes approval harder for self-employed borrowers, small business owners, or anyone with credit challenges.
Bridge Loan vs. HELOC for Down Payment: Which Works Better?
When you need money fast for a down payment, the speed difference between a bridge loan and a HELOC becomes impossible to ignore. Bridge loans are specifically designed for fast turnarounds, especially when buying before selling. They offer immediate liquidity without requiring the sale of your current property.
HELOCs, on the other hand, can provide down payment funds—but only if you already have one open. Opening a new HELOC takes too long to support time-sensitive purchase opportunities. And because a HELOC requires strong credit and tight underwriting, many borrowers simply don’t qualify.
Using a HELOC as temporary bridge financing works only under very specific circumstances. If you already have an open HELOC with sufficient available credit, using it for a down payment or liquidity can work. But opening a new HELOC during an urgent transaction is rarely feasible.
HELOCs are long-term products meant for flexible borrowing—not short-term, high-speed financing.
HELOC can work as a bridge financing method if:
- You already have one open
- You have strong credit
- There’s no urgency in your purchase timeline
You should opt for a bridge loan instead of a HELOC if:
- You need funding in under 30 days
- You can’t qualify for traditional bank underwriting
- You need higher loan amounts quickly
Pros and Cons Overview
Bridge loans offer unmatched speed and flexibility, especially for borrowers who can’t wait on banks or don’t meet strict credit requirements. They’re ideal for investors, buyers navigating tight timelines, and businesses needing temporary capital. Because they focus on property value rather than tax returns or credit scores, bridge loans open doors that traditional lenders often close. That said, bridge loans come with higher interest rates and short terms, which means borrowers must have a clear exit plan.
| Bridge Loan Pros | Bridge Loan Cons |
| Fast closings | Higher rates |
| Flexible underwriting | Short repayment terms |
| Works for lower credit scores | Might require substantial equity |
| Ideal for buying before selling | |
| Asset-based approvals |
HELOCs, on the other hand, provide long-term, flexible access to your equity. They’re priced lower than bridge loans, but qualification is significantly harder, and approval times are much longer. Variable interest rates also introduce financial unpredictability. For borrowers who need certainty, speed, or lenient credit requirements, HELOCs can fall short.
| HELOC Pros | HELOC Cons |
| Flexible credit line | Slow approval |
| Lower interest rates | Strict credit & income requirements |
| Long-term borrowing structure | Variable payments |
Why Our Bridge Loans at HMLS Are a Better Fit for Borrowers Who Need Fast, Flexible Funding
Choosing between a bridge loan and a HELOC depends on your timeline, credit profile, and how quickly you need access to equity. Bridge loans offer unmatched speed and flexibility, making them ideal for investors, buyers with tight deadlines, and borrowers who can’t qualify for traditional loans.
At HMLS, we specialize in helping borrowers who can’t qualify for traditional financing—whether due to credit challenges, income documentation issues, or the need for fast liquidity. Our bridge loans are designed for buyers, investors, LLCs, small businesses, and anyone who needs capital immediately without running through layers of bank red tape.
We close quickly, offer flexible underwriting, and structure our loans around the value of your property, not perfect paperwork. Whether you’re trying to buy before selling, access fast cash for an investment opportunity, or secure funding that banks won’t provide, our team moves fast to get you approved.
Some of the benefits of getting a bridge loan with HML Solutions are:
- We offer loan amounts from $200,000 to $20,000,000, giving you the flexibility to fund everything from a single-family purchase to large-scale investment opportunities.
- Our 50% LTV structure allows us to approve deals that traditional lenders simply won’t touch, especially when speed or credit challenges are involved.
- With 12–24 month terms, you get enough breathing room to sell your property, refinance, or complete your investment strategy without pressure.
- We close in as little as 1–2 weeks, so you can act quickly, compete in fast-moving markets, and secure opportunities before they disappear.
- We fund all property types, ensuring your deal moves forward whether it involves residential, commercial, mixed-use, new construction, or specialty real estate.
If you’re weighing a bridge loan vs a HELOC and need speed, flexibility, and a lender who understands urgent transactions, we’re ready to help.
If you’re ready to move forward, apply now and our team will start reviewing your deal immediately so you can get funded without delays.
Bridge Loan Versus HELOC FAQs
Is a bridge loan better than a HELOC?
If you need fast, flexible financing, a bridge loan is usually better. If you have strong credit and no urgency, a HELOC may work.
Can I get a bridge loan with bad credit?
Yes—bridge loans are asset-based and don’t require perfect credit.
Can a HELOC be used to buy another house?
Yes, but if you’re not in a hurry or already have one open. Keep in mind that opening a new HELOC might take too long.
How fast can a bridge loan close?
Often in as little as 7–14 days.
Featured image: Ian MacDonald
