What Is A Bridging Loan?

What Is A Bridging Loan?
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  1. According to Wikipedia, “A bridge loan is a type of short-term loan, typically taken out for a period of 2 weeks to 3 years pending the arrangement of larger or longer-term financing. It is usually called a bridging loan in the United Kingdom, also known as a “caveat loan,” and also known in some applications as a swing loan.” Simply speaking, to get immediate cash flow, a person or company secures permanent financing or removes an existing obligation through this short term loan. This is also known as gap financing since they bridge the gap during times when financing is needed but not yet available. Also it could be noted that these loans normally come at a higher interest rate than other credit facilities such as a home equity line of credit.

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