Short-Term Loan
Explore how short-term loans work in Canadian real estate and how they help bridge financial gaps during fast-moving transactions or transitions.
May 22, 2025
What is a Short-Term Loan?
A short-term loan is a temporary loan with a repayment period of less than one year, typically used to cover immediate or transitional real estate expenses.
Why do Short-Term Loans Matter in Real Estate?
In Canadian real estate, short-term loans provide fast access to funds when timing is critical. They are commonly used to bridge the gap between buying and selling properties, fund renovations, or meet closing requirements while waiting for long-term financing.Key characteristics include:
- High interest rates due to shorter repayment windows
- Often interest-only, repaid in a lump sum
- Can be secured by home equity or collateral
Short-term loans can come from traditional lenders or private sources and are particularly useful for real estate investors, house flippers, or buyers in competitive markets.
Understanding short-term loans helps buyers and sellers navigate cash flow gaps and prevent missed opportunities due to timing constraints.
Example of a Short-Term Loan in Action
A buyer takes a 90-day short-term loan to cover a $40,000 deposit while awaiting the closing of their existing home sale.
Key Takeaways
- Temporary loan repaid within a year.
- Used to bridge timing or funding gaps.
- Higher interest, faster approval.
- Useful for fast closings or renovations.
- Often repaid after a property sells or is refinanced.
Related Terms
- Bridge Loan
- Private Lending
- Short-Term Financing
- Down Payment
- HELOC
Building height changes from the previous master plan apllcation. (Peterson)
An overview of Blake Village and the phasing plan. (Peterson)
An overview of Blake Village and planned open space. (Peterson)
Hudson’s Bay vacated about as much space as Target did in 2015. (JLL)
A rendering of Frame in East Vancouver. (Peterson)
The Tesla facility set for 908 Raymur Avenue in Vancouver. (Beedie)
Phase One of Sen̓áḵw in Summer 2025. (OPTrust, Nch’ḵay̓)
(QuadReal Property Group, Westbank)
The two-tower Cascades project under construction in mid-2025. (Ledcor)
A rendering of Perla near Central Park. (Polygon Homes)
Phase One of Concord Metrotown is located at the corner of Kingsway and Nelson Avenue in Burnaby. (Concord Pacific)
Myriad will complete Concert Properties’ Heart of Burquitlam community. (Concert Properties)
SOCO 2 (left) in Coquitlam. (Drew Powell, LinkedIn)
King George Hub in Surrey. (Submitted by PCI Developments)