What is a Bridging Loan?

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The bridging loan is viewed as a loan-anticipation loan; it is a short-term loan you apply for while waiting for a completion of some long-term permanent funding. The loan principle advantage is the time it takes to mature; you don’t have to wait too long to achieve your desired goal. You can leverage the equity of your current home and/or retirement package to enable you move into your dream home some weeks or months ahead of the mortgage approval.

You may be needed to produce a security by real property or personal assets. These can be either liquid assets, a stash of gold-bars, certificate of deposit and the rest. The lending institution or moneylender can quickly convert them if you default. The home security loan, where your lender uses the equity as security is also another source of bridging financing.

This loan helps a person or a company to meet their necessary obligations with the help of immediate cash flow. The loan is very helpful for those who have small businesses but want some loan to expand. The bridge loan can actually help an individual to start a business or do whatever he/she wanted the loan for before money comes into his/her account. Bridging loan provides some flexibility to the home owners and this loan is really gaining popularity in the modern market because of its time limit.

What You Can Do With Bridging Loan?

Usually people apply for the bridging loan for various reasons, here are some of the things you can do with this kind of loan.

  • To raise short term working-capital for business
  • For temporary problems in cash flow
  • In order to pay some unidentified demands in tax
  • To purchase a property at auction
  • To construct commercial, residential and industrial units
  • To renovate your properties
  • Purchasing land

Advantages of Bridge Loans:

Fast Approval of Loans – this loan is approved fast by the banks, they know that you apply for this loan when you are in some financial fix and you need assistance immediately. Usually the minimum time the banks take to approve this loan is 24 hours only.

Short-term Financial Assistance -this loan usually helps to ease short time money drought, it helps in situations where you need to take quick decisions that will give you guarantee of receiving money very fast. Its repayment period always varies from 1-12 months, therefore, if you require immediate cash and you are sure of receiving some money in a short-term then you can go for this loan.

This loan can help you in several ways, it can help you settle you financial issues very fast and save your business from collapsing very fast.

A bridge loan will allow you to apply the net equity of an existing home as the down payment for the new home you want before the equity is realized .The bridging financing can also help you alleviate the timing pressure of moving immediately from your old home to the new home on the closing date.

 

 

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