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bridge loan |
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Bridge Loan A loan for a short-term period, usually two weeks to three years, until long-term financing can be arranged or an obligation is removed. Interest rates are relatively high, often 12-15%. Bridge loans are used to satisfy working capital needs; for example, if a company is arranging for an IPO or a bond issue in the coming months, but needs capital before then, it may take out a bridge loan. In doing so, it will plan to pay back the bridge loan with the money raised in the longer-term financing. bridge loan A short-term loan intended to bridge the gap between other transactions. (1) Temporary financing obtained at the end of a construction loan period but before permanent financing can be arranged. (2) A loan obtained by a home buyer when the equity from an existing home is necessary to provide the down payment for a new home,but the buyer has been unable to sell his or her old home as of that time (frequently offered by employers who transfer employees to new cities). Bridge Loan A short-term loan,usually from a bank,that “bridges”the period between the closing of a home purchase and the closing of a home sale. To qualify for a bridge loan, the borrower must have a contract to sell the existing house. This is the same as a “swing loan.” See Housing Investment/Buying the Next Home Before the Existing One How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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Loan types included multi-family, bridge loans for land as well as income producing and non-income producing commercial properties, construction loans, including ground up, renovation, and conversion projects, land acquisition and development loans, secured and unsecured revolving lines of credit and permanent loans with both five and 10 year terms. Funds buying financial claims against struggling companies or extending bridge loans to them will also be eligible for tax-exempt status. Some of the most common types of debt financing available to the entrepreneur include demand loans, lines of credit, bridge loans, conditional sales purchases and floor financing. |
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