Gap Loan

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Gap Loan

Financing that is needed but unavailable. A common solution to filling a gap is borrowing. See also: Bridge loan.
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BANKING AND CREDIT NEWS-July 14, 2015-Banks in Illinois offers payroll gap loans to state employees
The Illinois Bankers Association said banks throughout Illinois are offering short-term payroll gap loans at minimal or no cost to their state employee customers in order to provide assistance during the current state budget impasse.
Insurance companies, during their Hollywood period (roughly the early '90s), offered to insure gap loans on films.
Of particular concern to the student group are so-called "gap loans" issued by for-profit colleges to cover the difference between tuition and a student's ability to pay.
Gap loans were originally used to cover (or "bridge") the difference between a construction loan and a permanent loan.
The support for homewners package will include independent financial advice, Homeswap, shared ownership and equity gap loans.
"Two, three, four years ago, there was lots of competition in the size of gap loans banks would do--40%-50% and more of the budget.
Those that do--notably LHO, Comerica, Dexia-BIL, Natexis, Royal Bank of Scotland and DZ Bank-London--require producers to first tally up at least 80% of production budgets, with remaining unsold territories worth 200% of the gap loans. Given the paucity of international presales these days, this means that equity investments and soft money, such as subsidies from Euro governments, have become a virtual necessity for financing an indie film, sometimes covering up to half the budget.
Often they finance transitional housing, including single-room occupancy and co-housing projects, looking to fund acquisition and construction gap loans in concert with larger lenders or to provide seed money to entice others on board.
"But they lack the experience of going through the problems with gap loans. You never learn anything when everything goes well."
Horwitz made 23 gap loans through the end of May, compared with 31 for all of 1996 and 29 for the previous year.
Banks and others making gap loans have played a crucial role in the growth of independent companies represented by the American Film Marketing Assn., which registered a 21% gain in exports last year to $1.7 billion.