bridge loan

(redirected from Swing loans)
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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 that is taken out until permanent financing can be arranged. Also called swing loan.

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
Is Sold.

References in periodicals archive ?
On purchase money transactions, the appraisal for the senior lien is generally sufficient, and requirements are minimized for swing loans.
Swing loan demand is inversely proportional to activity in the housing market.