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    BRIDGE LOAN

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    A bridge Loan is a short term loan used until a person or company secures permanent financing or removes an existing obligation. Bridge Loan type of financing allows the user to meet current obligations, working capital and regular operational expenses by providing immediate cash flow. Bridge Loan is short term, up to one year, with relatively high interest rates and are usually backed by some form of collateral such as real estate or inventory.

    Bridge Loan also known as interim financing, gap financing or swing loans, bridge loans “Bridges the Gap” during the times when financing is required but is not dispose. Both corporations and individuals use bridge loans and lenders can customize these loans for many different situations.

    How Do Businesses Use Bridge Loans?

    Businesses turn to bridge loans when they are waiting for long term financing and need money to cover expenses in the interim. For example, imagine a company is doing a round of equity financing expected to close in six months. It may opt to use a bridge loan to provide working capital to cover its payroll, rent, utilities, inventory costs and other expenses until the round of funding goes through.