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Interim Bridge Loans
Interim bridge loans, or simply bridge loans, are oftentimes referred to as “gap financing”, “interim financing”, or “swing loans” and are typically used until a company or individual obtains permanent financing or removes existing debts. This type of short-term (up to 1 year) loan provides the borrower with immediate cash flow so they can meet their current debt obligations. These loans are usually secured with some form of collateral such as inventory or real estate parcels and typically have higher interest rates.
As the name of these loans imply, this type of funding “bridges the gap” between those periods of time when you need financing. They are available to companies and individuals alike and can be tailored a number of different situations. As an example, let’s assume your company has applied for equity financing and that you expect that loan to close within the next 6 months. An interim bridge loan could secure the working capital you need right now until the equity financing goes through.
When an individual applies for a bridge loan, they typically do so when the funding applies to real estate. As you may well know, there is oftentimes a gap between selling a property and buying another. Interim bridge loans provide the borrower with the flexibility they need to bridge that period of time between the sale and the ensuing purchase. The terms on a bridge loan will typically range from as little as 2 weeks up to a period of 3 years.
Types of Bridge Loans
The following 4 types of bridge loan financing are the more common ones that companies and individuals oftentimes apply for:
Interim financing – this simplified type of funding is ideal for completed commercial structures such as affordable housing projects and community development projects.
Mezzanine financing – this type of financing is extremely effective and secure when you want to finance a variety property types. It can be used to fund the acquisition of multi-family properties or the rehabilitation of them as well as financing for-sale rural and urban residential projects.
Multi-level financing – whether you need financing for a larger, more complex project or a smaller, simpler one, Biz4Loans can help you. We can customize an on-balance sheet structured loan to your needs or the needs of your business including:
- bridge/acquisition facilities
- floating rate-based junior and senior mortgage loans
- mezzanine loans
Short-term bridge financing – a company or individual can use this type of loan until permanent financing is secured or existing obligations are removed.
Biz4Loans can assist you with interim bridge loans as well as a wide range of other funding options. For more options, visit our home page or visit the Biz4Loans blog for other helpful articles and information.