A Commercial Bridge Loan is a short-term financing solution designed to address immediate financial needs while waiting for long-term financing to be secured.
Often, a company may be approved for a loan through its bank or financial institution, but the loan might not close for 4-6 months. During this waiting period, a short-term bridge loan can be provided, which will be repaid when the senior loan closes, ensuring that the company's short-term financial needs are met without delay. These loans are particularly valuable in situations requiring rapid action, such as property acquisition, renovation, or seizing time-sensitive opportunities.
Typically ranging from six months to three years, bridge loans offer the crucial advantage of speed and flexibility. They may come with higher interest rates and fees due to their short-term nature, but they allow borrowers to capitalize on immediate opportunities that might otherwise be lost. Additionally, other types of short-term collateralized loans can be offered, with the ability to close in as little as 10 days or less, providing further flexibility in accessing necessary funds.
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