Bridge Loan
What is a Bridge Loan?
A bridge loan is a short-term loan that helps companies meet immediate financing needs while waiting for longer-term funding to become available. It is often used by startups to cover short-term expenses, such as operating costs, until they can secure additional financing. Bridge loans are typically backed by collateral and have higher interest rates due to their short-term nature.
Common Uses of Bridge Loans
- Cash Flow Management: Providing funds to maintain operations while awaiting a larger funding round.
- Acquisition Financing: Covering the cost of an acquisition before securing long-term financing.
- Real Estate Purchases: Used to buy property quickly, pending the sale of another property.