A bridge loan is basically a short term loan -- usually repaid in less than a year. The reason for a bridge loan, or bridging finance, is to cover the expenses of the borrower until a more long term loan or funding is secured. Bridge loans provide immediate cash flow for borrowers as payment for various abrupt financial obligations while waiting for the approval of standing deals or contracts.
Taking a bridge loan means you will be paying a high rate of interest, and you must back it with collateral. These types of loans, like their name suggests, bridge the gap from when the individual receives more long-term loan and his direct financial obligations. Bridging finance may be utilized in a variety of financial scenarios.
The owner of a business may secure bridging finance in order to secure needed working capital while he completes equity financing deals which can often take several months.
Bridge loans are often used when selling real estate. This can be useful when the real estate market is slow or a particular house is not selling fast enough. Homeowners who want to sell their homes and buy a new one utilize bridge loans to finance their various obligations such as utility bills and food bills, while their old home is still on the market. Also, they may use the bridging finance as "chain breaking", meaning they use the loaned amount to purchase a new house while they are still on the process of dealing their current house to prospective buyers.
Another useful aspect of bridge loans is they can be used to boost credit scores. Bridge loans may be used by borrowers to pay outstanding debts, thus making a positive credit score and enabling the borrower to apply for other loans that are more permanent and larger in amount. These loans also help bridge the gap between leaving one job and starting another. Similarly, bridge loans may be useful to finance relocation costs when someone moves because of their job.
Bridging finance can often be acquired in just 24 hours, as the high interest rate, short duration, and collateral backing alleviate the need for extensive background checks and risk consideration.
Taking a bridge loan means you will be paying a high rate of interest, and you must back it with collateral. These types of loans, like their name suggests, bridge the gap from when the individual receives more long-term loan and his direct financial obligations. Bridging finance may be utilized in a variety of financial scenarios.
The owner of a business may secure bridging finance in order to secure needed working capital while he completes equity financing deals which can often take several months.
Bridge loans are often used when selling real estate. This can be useful when the real estate market is slow or a particular house is not selling fast enough. Homeowners who want to sell their homes and buy a new one utilize bridge loans to finance their various obligations such as utility bills and food bills, while their old home is still on the market. Also, they may use the bridging finance as "chain breaking", meaning they use the loaned amount to purchase a new house while they are still on the process of dealing their current house to prospective buyers.
Another useful aspect of bridge loans is they can be used to boost credit scores. Bridge loans may be used by borrowers to pay outstanding debts, thus making a positive credit score and enabling the borrower to apply for other loans that are more permanent and larger in amount. These loans also help bridge the gap between leaving one job and starting another. Similarly, bridge loans may be useful to finance relocation costs when someone moves because of their job.
Bridging finance can often be acquired in just 24 hours, as the high interest rate, short duration, and collateral backing alleviate the need for extensive background checks and risk consideration.
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If you require short term finance then check out Alan Harding's website for more information on bridging loans
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