How a Manufacturing Business Owner Bridged $1.6M for 9 Months While SBA Processed His 7(a) Loan
Sources: Small-Balance Commercial Refinance — PeerSense, Asset-Based Lending Hub
How did PeerSense solve this scenario?
Bridge closed in 18 days, SBA 7(a) takeout 9 months later. A 14-year machine shop owner specializing in precision aerospace and medical-device parts. PeerSense placed the deal into bridge-to-sba with conservative leverage, asset-based underwriting, and fast execution. Composite case study based on the deals we close every month.
— PeerSense Composite Case Study · 2026-05-01
At a glance
| Loan size | $1.6M acquisition bridge |
| Property type | 22,000 SF light industrial / machine shop building |
| LTV | 70% |
| Term | 12-month interest-only |
| Permanent loan | SBA 7(a) at month 9 |
| Use case | Bridge while SBA underwriting completes |
The borrower
A 14-year machine shop owner specializing in precision aerospace and medical-device parts. He'd been leasing his 22,000 SF facility for 11 years. When his landlord listed the building, the borrower wanted to buy — owning the building cuts his occupancy cost by ~30% over 10 years and lets him invest in long-overdue improvements (electrical capacity for new CNC equipment, dust collection, expanded loading docks).
The acquisition price worked. He had enough liquidity to fund the SBA 7(a) down payment (10%) and reserves. The problem was timing: the seller wanted to close in 45 days, and SBA 7(a) underwriting was running 90-120 days at the time he applied.
Why traditional financing said no
SBA 7(a) is the right permanent solution. It's purpose-built for owner-occupied commercial real estate acquisition with: - 90% financing - 10-25 year amortization - Competitive rates pegged to prime - No prepayment penalty after 3 years
But SBA underwriting takes time. Even with a packaged borrower, expect 60-120 days from application to close. The seller's 45-day deadline was non-negotiable.
If the borrower walked, he'd lose the property to a competing buyer. If he closed in cash, he'd drain his operating reserves.
How PeerSense solved it
We placed the deal into a bridge-to-SBA program specifically structured for this scenario. The bridge is designed to be a placeholder loan — closed quickly to meet the seller's timeline, paid off cleanly when the SBA 7(a) closes 6-12 months later.
The structure:
- $1.6M acquisition bridge at 70% LTV
- 12-month interest-only term with 6-month extension at borrower's election
- No prepayment penalty — designed to be paid off when SBA closes
- Pricing in the low-double-digit range — explicitly priced higher than SBA, because the bridge is the temporary tool, not the permanent home
- Closed in 18 days
The bridge-to-SBA workflow: 1. Day 1-18: Bridge underwriting and close (parallel with SBA application submission) 2. Day 19-90: Borrower operates with the bridge loan in place; SBA 7(a) underwriting proceeds in parallel 3. Day 90-270: SBA approval, environmental, appraisal, commitment 4. Day 270 (target): SBA 7(a) closes; bridge paid off in full at SBA closing
In this case, SBA closed at month 9 — within the bridge's 12-month term, no extension needed.
The outcome
- Acquisition closed on the seller's timeline (45 days) — kept the deal alive
- SBA 7(a) closed at month 9 — well within the bridge term
- Bridge paid off in full at SBA closing, no prepayment penalty
- Borrower's effective long-term financing is the SBA 7(a) — 25-year amortization, prime-pegged rate, no balloon
- The bridge was the tool that bought the time — without it, the deal dies
Frequently asked questions
What is a bridge-to-SBA loan?+
A short-term bridge loan (typically 6-18 months) used to close on owner-occupied commercial real estate while an SBA 7(a) or 504 loan is being underwritten. The bridge is paid off when the SBA loan closes.
Why not just wait for the SBA loan?+
Because most sellers won't wait 60-120 days for SBA underwriting to complete. Sellers want certainty of close. A bridge gives you the ability to commit to the seller's timeline while the SBA process runs in parallel.
What LTV can I get on a bridge-to-SBA?+
Typically 65-75% LTV. The bridge is intentionally sized below SBA's 90% financing because the borrower is bringing the SBA down payment plus closing costs to the table.
What's the typical rate on a bridge-to-SBA?+
Higher than SBA — typically 9-13% interest-only — reflecting that the bridge is the temporary tool. The all-in cost over 9-12 months is small relative to the value of getting the deal closed.
Are there prepayment penalties?+
Most bridge-to-SBA programs explicitly waive prepayment penalties (or burn them off after 3-6 months) because the structure assumes early payoff at SBA closing.
What if SBA takes longer than expected?+
Most bridge programs include a 6-month extension option for an additional fee (typically 0.5-1.5% of the loan amount). Some borrowers extend; most don't need to.
Can SBA approval be denied after I close on the bridge?+
It's rare if the borrower is well-qualified. Most experienced bridge lenders will not close a bridge unless the borrower has at least preliminary SBA preflight clearance. The SBA risk is real but manageable.
Can I use this structure for SBA 504 instead of 7(a)?+
Yes. SBA 504 also takes time to underwrite (the dual-loan structure with a CDC adds complexity). Bridge-to-504 is a recognized variant of the same product. ---
Have a similar scenario?
Composite case studies based on the deals we close every month. PeerSense routes to the right program + lender.
Composite case study. Names, locations, identifying details, and dollar amounts modified to protect borrower privacy. Actual rates and terms vary by borrower, property, and market conditions. PeerSense is a capital advisory firm and does not directly originate loans.