Bridge Loan

Definition

A bridge loan is a short-term financing solution designed to 'bridge' the gap between an immediate capital need and a longer-term financing solution. In commercial real estate, bridge loans are commonly used to acquire or renovate properties before securing permanent financing or selling the asset. In business lending, bridge loans help companies cover expenses during transitions such as waiting for a larger loan to close, managing seasonal cash flow gaps, or funding operations during a business sale. Bridge loans typically have terms of 6 to 24 months, higher interest rates than permanent financing, and may require collateral.

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