Definition of "Bridge loan"

Paul Van Zandt real estate agent
Paul Van Zandt, Real Estate Agent Realty Professionals of Texas

(1) Short-term loan that is made in anticipation of permanent longer term loans. The interest rate on such a loan is usually higher than on longer term loans. (2) A business loan in which cash is received for a specific transaction, and repayment will be from cash flows from an identifiable source. The purpose of the loan and the source of repayment are related; hence the reference bridge loan.

 

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