Sometimes, the time between needing senior living and having the funds for it doesn’t quite line up. That’s where bridge loans can provide breathing room for families and their loved ones.
So, if you’re wondering, “What is the cost of senior living and how can I pay for it without delaying important care?”, a bridge loan might be the right choice for you. Here, we’ll explain how bridge loans work, why families use them, and how one might help smooth the transition to and pay for the costs of a senior living community.
What is a bridge loan?
Bridge loans are short-term financing options designed to “bridge the gap” between the need for immediate cash and the future availability of cash. Since they are short-term loans, they can help cover the cost of senior living while waiting for long-term funds in the form of the sale of a home, tapping into an investment fund, disbursement of long-term care benefits, or asset transfers becoming liquid.
Bridge loans are designed to be simple and fast and can be structured as a lump sum or a line of credit, depending on the borrower’s needs and the lender’s requirements. But remember, while bridge loans have many advantages, the most important thing is to have a solid plan for how the loan will be repaid!
Why families use bridge loans for senior living
When it comes to paying for senior living and care, a bridge loan might make sense if you don’t want to wait to begin receiving the support you or your loved one need. The biggest plus is that they can serve as quick cash to cover urgent expenses like senior living move-in fees, monthly rent, or care services. You might consider a bridge loan if your home is still on the market, you are still waiting for benefits to come through, or your access to funding is otherwise delayed.
Getting a bridge loan
If you’re qualified, the process of securing a bridge loan can be relatively quick. Here’s how it can work:
- Look for a lender that specializes in senior living bridge loans to help you begin the application process. Lenders like these will understand the unique financial timelines involved in senior living. You can also ask our Provision team for trusted recommendations!
- Gather important documents. You’ll typically need to provide a range of financial information for the application including proof of a future funding source (like a home for sale), a strong credit score, a list of your assets for collateral, income verification, and an accounting of any debts.
- Receive approval. Because bridge loans are so often used during time-sensitive transitions, the turnaround for approval is usually quick, sometimes within 24 to 48 hours.
- Deploy the funds to cover your senior living move-in costs, monthly expenses, or levels of care.
- Repay the loan once the home sells or other funding sources become available, usually within six to 12 months. There may be interest charges or fees involved, so understand the terms of the loan clearly first!
Exploring senior living financing
At Provision Living, we’ve supported many families who are navigating the financial side of senior living, including exploring funding options like bridge loans. We would be happy to walk you through your financing options, connect you with educational resources, and even introduce you to trusted lenders who understand the unique needs of older adults and their families.
Looking to learn more about financing a transition to Provision? Speak to one of our helpful community advisors. Ready to visit a Provision Living community in person? Schedule a visit today!
