There are several reason why you might need to get funds fast. Maybe you plan to make a real estate purchase. Or perhaps you need to cover operating expenses while you secure long-term financing. In all these scenarios (and many others), a bridge loan can help you get where you want to be.
What Is a Bridge Loan?
A bridge loan is a short-term financing solution that allows you to cover a temporary cash gap.
Bridge loans are also known as swing loans, gap financing, or interim financing. This type pf loan is popular for the flexibility and convenience it affords.
As we’ll see in a minute, bridge loans are used in many industries. However, real estate is one of the best examples of how bridge loans work.
Imagine, for example, a couple who wants to buy a new, larger home but haven’t sold their current house yet. They can use the equity built on their old home to take out a bridge loan for the down payment on their new place. Then, once their current house is sold, they can use the money to pay off the bridge loan.
Other common scenarios where a bridge loan can come in handy include:
- Business: Cover day-to-day expenses while you secure long-term financing.
- Retail: Seize time-sensitive opportunities to purchase inventory.
- Real estate: When a home seller won’t accept a contingent offer.
What You Need to Keep in Mind
No financing solution works for everyone or for every situation, and bridge loans are no exception.
While bridge loans are extremely useful in many cases, there are some things you need to consider before taking out one.
To begin with, the interest rates on bridge loans tend to be higher compared to other types of lending.
Second, due to the nature of these loans, the repayment terms are usually short (no longer than a year).
If you are comfortable with a relatively high rate and are able to repay your loan in the short term, then bridge loans may be the right option for you.
Interested in learning more about bridge loans? Contact our experts at Gellyfish Commercial. We’ll be happy to answer your questions and help you make sense of your financing options.
Gellyfish Commercial: Certainty of Execution in Bridge Loans
Looking for a bridge loan in California, or anywhere in the United States? Gellyfish Commercial is here to help. We offer financing solutions with the certainty of execution you need to take your business to the next level.
We are located in Riverside, and work with clients all over California and beyond. Contact us today by email (email@example.com), telephone (877-800-4493), or social media (Facebook, Twitter, LinkedIn), to schedule a free consultation or to learn more about our full range of financing options.