bridging loan


Also found in: Dictionary, Wikipedia.

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.

bridging loan

a form of short-term LOAN that is used by a borrower as a continuing source of funds to ‘bridge’ the period until the borrower obtains a medium or long-term loan to replace it. Bridging loans are used in particular in the housing market to finance the purchase of a new house while arranging long-term MORTGAGE finance and awaiting the proceeds from the sale of any existing property.

bridging loan

a form of short-term LOAN used by a borrower as a continuing source of funds to ‘bridge’ the period until the borrower obtains a medium- or long-term loan to replace it. Bridging loans are used in particular in the housing market to finance the purchase of a new house while arranging long-term MORTGAGE finance and awaiting the proceeds from the sale of any existing property.
References in periodicals archive ?
What separates a bridging loan from a conventional financial product is two very important things.
Bridgingloans.co.uk is a leading UK finance broker & principle bridging loan funder with a unique commitment to transparency and customer service excellence.
The past year has brought about yet another spike in bridging loans interest among British investors looking into buy-to-let opportunities.
Newly formed British challenger bank Aldermore on Wednesday reported that it is enhancing its bridging loan offering.
The enhanced bridging loan offering will see the bank reduce its minimum valuation for light refurbishment to GBP75,000, a reduction from GBP100,000 and in line with Aldermore's residential and buy to let mortgages.
The money will also be used to pay back bridging loans earlier granted by the BNDES.
Angel Mining PLC (Angel Mining), a mining company currently focused on Greenland, has extended its bridging loan with Cyrus Capital Partners (Cyrus Capital).
The bridging loan has been extended until August 31, 2010.
If the bridging loan had been granted, there is no doubt whatever that SAIC would have completed their joint venture agreement with MG Rover and Longbridge would still be building cars today.
Fixed rates on residential investment bridging loans begin at 0.64% with a maximum loan size of GBP3m and facilities at up to 75% loan to value, commercial bridging loans are available from 1.09% with lending up to GBP5m and a maximum loan to value of 65%.
Bridging loans have less stringent lending criteria to other sources of finance, so having failed to find a method of finance through the more traditional sources some people are turning to bridging loans as an alternative option.
The important thing to remember is that bridging loans are a short term method of finance and should only be taken out if this is what they are going to be used for.