Every now and then we find ourselves in a situation where we need a quick injection of cash for different reasons. It may be the gap in between buying and selling of a property, for an entrepreneur to cover for his expenses before he receives payment from his buyers.
Bridging loans basically fill the time gap of a transaction, which takes place between two parties.
The option of bridging loans may be exercised for following reasons
To raise the capital when there is a gap in sale of the property
To purchase property in a hurry, i.e. from an auction
To buy one property before we sell the another property
Temporary funding for the purchase of a defective property
For an entrepreneur who sells his goods on credit he may need bridging loans as working capital requirements before he gets paid by his borrowers.
A bridging loan is basically a short term secured loan, which is taken by the borrowers to make do for a short period of time. Therefore, they carry a little higher rate of interest. You need to provide collateral to avail these loans. You can provide any of the following as a security to cover up for bridging...
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