Divorce proceedings operate on crisis time. Court deadlines approach like freight trains, partnership buyouts demand payment in 120 days, and business disruption starts immediately.
Meanwhile, traditional permanent financing moves at the speed of bureaucracy—60 to 90 days if you're lucky, often longer if you're realistic.
This timeline mismatch destroys businesses and forces owners into devastating compromises. Bridge financing solves the crisis by providing immediate capital while you arrange long-term solutions.
Understanding Bridge Financing
Bridge financing is exactly what it sounds like—a financial bridge that gets you from crisis to resolution. It provides immediate liquidity to handle urgent requirements while you arrange permanent financing, sell assets, or resolve legal disputes.
Key Characteristics:
- Short-term duration (typically 6-24 months)
- Fast approval and funding (days, not months)
- Asset-based underwriting focused on collateral value
- Interest-only payments with balloon repayment
- Flexible exit strategies
Why Divorce Situations Need Bridge Financing
Timeline Compression: Legal deadlines don't accommodate banking schedules. When a court orders buyout completion in 90 days, you need funding that moves at legal speed.
Credit Complications: Divorce often temporarily damages credit scores through increased debt utilization, missed payments during financial chaos, or joint account complications.
Income Documentation Challenges: Traditional lenders want steady W-2 income. Business owners facing divorce often have irregular distributions, disputed business valuations, and complex financial profiles.
Uncertainty Periods: Permanent lenders hate uncertainty. Divorce proceedings create maximum uncertainty about future income, asset ownership, and business operations.
How Capital Direct Funding's Bridge Financing Works
Phase 1: Crisis Response (48-72 hours)
We evaluate your situation, business value, and immediate capital needs. Our underwriting focuses on asset value and cash flow potential, not temporary credit complications.
Phase 2: Rapid Funding (7-14 days)
Once approved, we move quickly to close and fund. No committee approvals, no bureaucratic delays, no last-minute surprises that kill deals.
Phase 3: Bridge Period Management
During the bridge period, you handle your divorce proceedings while we provide patient capital. Interest-only payments preserve cash flow for legal fees and business operations.
Phase 4: Exit Strategy Execution
When you're ready—whether that's refinancing, asset sales, or settlement completion—we facilitate smooth transition to permanent solutions.
Real-World Applications
Partnership Buyout Crisis: Manufacturing company partner facing 120-day RUPA deadline. Traditional banks wanted 4 months for approval. We funded the buyout in 10 days, preserving the business and partnership relationships.
Professional Practice Division: Medical practice owner needed $800,000 to buy out spouse's community property interest. Permanent financing would take 3 months; court deadline was 75 days. Bridge financing provided immediate solution while practice continued operating normally.
Asset Offset Coordination: Tech executive needed $1.2 million to offset business value against real estate holdings. Complex asset coordination required 6 months to complete, but immediate funding was needed to prevent forced business sale.
Competitive Advantages
Speed: 48-hour approvals versus 60-90 day traditional timelines Specialization: We understand divorce law requirements and business valuation complexities
Flexibility: Repayment terms align with your timeline, not arbitrary bank requirements
Certainty: Once approved, funding is guaranteed—no last-minute surprises or changing requirements Support: We work with your legal team to ensure financing supports your overall strategy
Interest Rates and Terms
Bridge financing carries higher rates than permanent financing because it provides speed and flexibility that traditional lending cannot match. Rates typically range from 10-16% depending on:
- Business cash flow strength
- Asset quality and loan-to-value ratio
- Deal complexity and timeline requirements
- Exit strategy clarity and feasibility
Exit Strategy Planning
Successful bridge financing requires clear exit strategies:
Permanent Refinancing: Transition to traditional long-term financing once crisis resolves
Asset Sales: Use business or real estate sales to pay off bridge loan Settlement
Completion: Final divorce settlement provides payoff funds Business Cash Flow: Strong cash flow businesses can sometimes pay down principal over time
Risk Management
For Borrowers: Bridge financing is expensive, so clear exit planning is essential. Don't use bridge loans for permanent financing needs.
For Lenders: We mitigate risk through conservative loan-to-value ratios, strong collateral positions, and thorough exit strategy evaluation.
When Bridge Financing Makes Sense
Crisis Timeline: You have immediate deadlines that traditional financing cannot meet Strong Assets: Business or real estate value significantly exceeds loan amount
Clear Exit: Permanent solution is achievable within bridge loan term Cost-Benefit: Bridge financing costs less than alternatives (forced sales, legal penalties, business dissolution)
Why Choose Capital Direct Funding
We've built our entire business model around crisis financing for California business owners. We understand the legal requirements, timeline pressures, and strategic considerations that make divorce buyouts successful.
While traditional banks debate your paperwork, court deadlines approach and negotiating leverage evaporates. Bridge financing preserves your options and prevents crisis-driven compromises.