Bridge Loan Business Plan and Capital Stack Template

What is a capital stack?

Use the template below for any bridge request. It's also a useful way to check your own plan.

The capital stack shows all the money that pays for a project, in order of repayment priority:

1. Senior debt. The first-position loan, in this case the bridge loan. It's repaid first from a sale or refinance.
2. Subordinate debt or gap funding. Any second-position loan or other financing behind the senior loan, if the senior lender allows it.
3. Preferred equity or partner capital. Investor money with defined return rights, if any.
4. Common equity. Your own cash, repaid last but with the profit upside.

Higher layers are safer and usually cheaper. Lower layers carry more risk and expect more return. Many bridge lenders restrict or prohibit other liens behind them, so disclose every layer.

Axelrad Capital offers bridge loans and, separately, gap funding and creative financing. How those fit together on one deal depends on the structure and underwriting.

What goes in a bridge loan business plan?

1. Project summary (one paragraph). Property, strategy, timeline and exit.

2. Property facts. Address, type, units, square footage, condition, occupancy.

3. Sources and uses. Where every dollar comes from and where it goes.

4. Capital stack. Each layer, its amount, its position and its terms.

5. Leverage. LTC (loan-to-cost: the loan divided by purchase price plus renovation budget) and LTV (loan-to-value: the loan divided by property value, as-is and after repair).

6. Schedule. Closing, work, leasing or listing, exit closing, and the buffer before maturity.

7. Exit. Sale (with sold comps) or refinance into a named takeout loan, the long-term loan that pays off the bridge (with its requirements).

8. Team and experience. You, your contractor, your property manager and similar past projects.

9. Risks and mitigations. The top three things that could go wrong and what you'll do about each.

Template part 1: project summary

Fill in each field, then copy the result into your plan.

Template part 2: sources and uses

Total uses is the sum of every cost line, total sources is the sum of every funding line, and the two have to match. Total sources have to equal total uses. If they don't, the plan is missing money.

Template part 3: capital stack

Each layer's share of total cost is its amount divided by the total of all layers, and the shares add up to 100%. Position 1 is the senior bridge loan and position 4 is your own equity.

Write the terms for each layer in words.

Template part 4: schedule and exit

Closing is month 0. Enter the target month for each milestone and the maturity from your actual term sheet, not a marketing range. The buffer is bridge maturity minus the month the exit closes.

Note the evidence behind each milestone.

Example: a filled-in sources and uses (hypothetical)

Example for illustration only. Not a quote or offer. The leverage is an assumption, not an Axelrad term.

Uses: purchase $280,000, renovation $70,000, closing costs $8,000, points and fees $6,000, carry $9,000, contingency $7,000. Total uses: $380,000. Sources: bridge funded at closing $210,000, bridge rehab holdback $70,000, borrower cash $100,000. Total sources: $380,000. The bridge loan is $280,000 against a purchase-plus-renovation cost of $350,000, or 80% LTC. The investor's $100,000 covers the rest of the cost plus closing, fees, carry and contingency. The stack has two layers, senior bridge and borrower equity, which is simple and easy to underwrite.

How do you present risks without weakening the request?

Lenders expect risks, and listing them shows you've done the work. Keep it to the top three, and pair each one with a specific mitigation. For example: "Contractor delay: fixed-price contract with a schedule, and a backup contractor identified." Or: "Appraisal below target: refinance tested at 10% lower value, with cash reserved for the gap." Or: "Slow lease-up: rent priced at the leased-comp median, with property manager engaged before work is finished." A plan that names its own risks and answers them is more credible than one that claims to have none.

What should you attach to the plan?

Attach the purchase contract, the line-item renovation budget and any contractor bids, sold or rent comps, takeout program requirements if refinancing, entity documents and ID. Those cover the items Axelrad's FAQ lists for firm terms (loan application, purchase contract, rehab budget, entity info and ID), plus the evidence that supports your exit.

How long should the plan be?

One page is ideal for a single-property bridge, and two pages is plenty for most deals. Put the details in attachments, not in the plan. Lenders read a lot of deal summaries, and the clearest ones lead with the numbers and the exit.

Key takeaways

• One or two pages, covering the deal, the money and the exit.
• Sources must equal uses. A gap means missing money.
• The capital stack shows who's repaid first. Disclose every layer to the senior lender.
• Calculate LTC and LTV yourself, and attach comps and takeout requirements.
• Use the maturity date from your term sheet, not a marketing range.

Send a plan that's easy to fund

Fill in the template and attach it to your application, or see the Bridge Loans page. Template for education only. Not legal or financial advice.