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Short-Term Financing

Explore short-term financing in Canadian real estate, how it works, who uses it, and why it's critical for bridging timing or funding gaps.

Short-Term Financing

May 22, 2025


What is Short-Term Financing?

Short-term financing refers to temporary loans or credit with repayment periods under 12 months, used to address immediate real estate funding needs.

Why does Short-Term Financing Matter in Real Estate?

In Canadian real estate, short-term financing is used when buyers face timing gaps — such as needing a down payment before selling a current home, or funding renovations prior to refinancing.

Common types include:
These loans typically carry higher interest rates but offer rapid approval. They’re often structured as interest-only and repaid in full once long-term financing or a sale is completed.

Short-term financing is useful in competitive markets and for investors or developers who need flexibility and speed to close deals.
Understanding this tool helps buyers take advantage of time-sensitive opportunities without long-term financial commitment.

Example of Short-Term Financing in Action

A developer uses a six-month private loan to fund renovations before applying for a mortgage refinance.

Key Takeaways

  • Loans repaid in less than 12 months.
  • Used for bridging, renovations, or fast closes.
  • Higher cost, faster access.
  • Often repaid after sale or refinance.
  • Valuable in competitive or time-sensitive situations.

Related Terms

Additional Terms

Land Banking

Gentrification is the process by which a traditionally lower-income neighbourhood undergoes revitalization and attracts higher-income residents,. more

Land Assembly

Land assembly is the process of acquiring and consolidating multiple adjacent parcels of land under one ownership, typically for redevelopment or. more

Joint Venture

A joint venture in real estate is a partnership between two or more parties to develop, own, or operate a property or project, sharing risks, costs,. more

Infill Development

Infill development is the process of building new housing, commercial buildings, or amenities on vacant or underutilized land within existing urban areas.. more

Inclusionary Zoning

Inclusionary zoning is a municipal planning tool that requires or incentivizes developers to include a percentage of affordable housing units in new. more

Impact Fees

Impact fees are charges levied by municipalities on new developments to offset the cost of additional public infrastructure and services required by. more

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