When it comes to getting the funds you need for your projects, timeframes and deadlines don’t always align neatly one after the other. When you come across a financing gap, a bridge loan is an ideal way to overcome the hurdles that stand in your way to success.
What Is a Bridge Loan?
A bridge loan is a short-term loan that meets immediate needs while you wait for permanent financing. Other names for bridge loans include swing loans, gap financing, or interim financing.
Keep reading to learn more about bridge loans: the differences with traditional loans, the most common uses, and the industries where bridge loans can make a difference.
What Is the Difference Between Bridge Loans and Traditional Loans?
While the basic principle is similar (drawing funds that you repay over a set period of time), there are important differences between bridge loans and traditional loans.
The most relevant difference is that bridge loans usually have a more agile application-approval process than traditional loans. It’s easy to see why: bridge loans are common in situations when time is critical, so it makes sense to process them faster.
What Are Bridge Loans Used For?
Bridge loans are common in real estate financing. For example, people may take out a bridge loan to stay in their existing home while they build a new one. Once the new home is finished, they sell the one they occupied previously and use the proceeds to repay debts, including the bridge loan itself.
In another common situation, companies use bridge loans to get working capital and cover day-to-day expenses (such as inventory, payroll, or utilities) while they negotiate long-term financing.
These are only two of the most common examples of bridge loans. This is a versatile instrument that can prove helpful in a vast number of cases across many industries:
- Startups
- Investment
- Commercial and residential real estate
- Technology-based companies
- Corporate finance
In short, bridge loans are a flexible solution that allows you to move forward with your projects even when the financing you need is not yet available.
Gellyfish: Certainty of Execution in Financing
Looking for a bridge loan in California? Gellyfish is here to help. We offer financing with the certainty of execution you need to take your business to the next level.
Contact us today by email (info@gellyfishcommercial.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.
