What is Swing loan?
Another name for a bridge loan, used most often on residential deals. It describes the same thing: short-term capital secured by the property that carries you from one position to the next.
Also called bridge loan, swing financing, gap loan.
An investor buying the next property before the current one sells is asking for a swing loan, whether or not they use the word.
Swing loan and bridge loan describe the same instrument; which word gets used is mostly a matter of who is speaking. Residential brokers tend to say swing loan, commercial desks tend to say bridge. Nothing about the structure changes with the name.
The shape is consistent: short term, secured by the property, and written against a defined exit rather than against long-term cash flow. Borrowers reach for one when timing is the problem rather than the deal — the next purchase has to close before the current sale completes, an auction has a deadline a conventional process cannot meet, or a property needs to be held while it is made financeable.
The two questions worth settling before signing are what happens if the exit slips, and what it costs to extend. A swing loan is priced for a short life, so the risk sits almost entirely in the timeline. If the sale that repays it takes an extra ninety days, the extension terms decide whether that is an inconvenience or a problem, and those terms are agreed at the start or not at all.
Defined in Regulation X, 12 CFR § 1024.5(b)(3).