Also known as interim financing, gap financing, or swing loans, bridge loans bridge the gap during times when company financing is needed but not yet available. This is the right business loan between two transactions to take advantage of an opportunity on the market.
Bridge loan is a short-term loan that allows you to obtain a partial advance on the amount of the sale of an asset, allowing you to meet current obligations by providing immediate cash flow. Imagine that you are waiting for the sale of an asset such as a building or a machine to finance another project that cannot wait. The bridging loan can be essential for the development of your new project, while waiting for the infusion of funds later.
Bridge loans also pop up in the real estate industry, imagine if you have spotted a rare property, which may not remain available on the market for long.
Consequently, the bridging loan will make it possible to finance this purchase, while waiting for the sale of your other properties.