What is Bridge Loan?

A definition of Bridge Loan

“A bridge loan is a short-term loan used to bridge the gap between financial obligations and future financing often repaid when permanent financing becomes available.”

Bridge Loan in Business Glossary - What is a Bridge Loan?

Business Glossary > What is Bridge Loan?


Examples of Bridge Loan in a Sentence:

The company secured a bridge loan to cover expenses until their funding round closed.

A bridge loan can provide temporary financial assistance to real estate developers.

Homebuyers sometimes use a bridge loan to buy a new property before selling the old one.

Why is Bridge Loan Important in Business?

A bridge loan is crucial for businesses or individuals who need immediate funds to meet short-term obligations. It ensures flexibility in managing cash flow, especially during transitional phases such as mergers or acquisitions.

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Associated Terms

Here are some associated business terms and synonyms for “Bridge Loan”:

  • Interim Financing
  • Gap Financing
  • Swing Loan

Real Estate Bridge Loan

A real estate development company took out a bridge loan to purchase land. This allowed them to start construction immediately while awaiting long-term financing. Such loans are significant in competitive real estate markets where timing is crucial.

Final Notes on Bridge Loan

When considering a bridge loan, take into account the interest rates, repayment terms, and loan-to-value ratios. It’s essential to have a clear exit strategy to repay the loan once the planned long-term financing arrangement is secured.


This has been a definition of Bridge Loan meaning.

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