Bridging
finance, also referred to as "bridge
loans" and "bridging loans",
have nothing at all to do with London
Bridge, Runcorn Bridge or any other
bridge. Bridging finance is typically
a short-term loan that a business uses
to supply cash for a real estate transaction
until permanent financing can be arranged.
The word "bridge" conveys
the fact that the loan is designed to
get you over a temporary obstacle. A
typical use for a bridge loan is to
cover situations such as when a company
needs to close on a new office building
before having sold their old one. They
would use the proceeds of the bridge
loan to continue making payments on
the old building until it is sold. Bridging
finance almost always requires that
you pledge some sort of collateral as
security against the loan. You could
offer up commercial or private real
estate that you own,or are in the process
of buying, machinery and office equipment
or even existing inventory. If you have
outstanding business and personal credit,
as well as an outstanding relationship
with your lender, you might be able
to secure your bridge loans on just
a signature. Because the need for bridging
finance sometimes arises suddenly and
without warning, it is a good idea to
establish a relationship with a broker
before the actual need arises. When
you do this you can arrange all the
pre-application information to be submitted.
Later, when the need suddenly arises,
you won't have to wade through all of
the red tape.
