In general speaking bridge loan is the short-term loan which is used for fast cash extract until the permanent financing could be achieved. A bridge loan lender offers lending to the borrower to bridge the financial gap of one transaction to another. This type of loan help take a good care of your short term needs and also try to solve the long-term financial problems. Bridge loans are gradually growing its popularity between the borrowers and often uses to buy foreclosure or commercial real estate, enables the borrowers to close on a property more quickly.

Most of the time bridge loan borrowers don’t utilize the lending until the situations occur and which are given below:

• When the property is sold
• When a property is completed or improved
• When a property could be refinance
• Any changes in financial situations or credit improve.
• Any change in the business which would allow permanent financial options.

Benefits:

Bridge loans are often known as “Swing Loan”, “Gap Financing” or “Interim Financing” because most of the time this type of loan takes very less paper work than a long-term loan. At the same time, it could also allow you to make an ambitious offer on a property without any possible clause. It is not at all important either you need a temporary lending or fast lending, a bridge is always useful and a perfect financial solution.

The Pros:

• This loan is specially designed to provide easy and fast loan in the time of financial crisis.
• This loan needs less paper works.
• It gives an extra time while waiting on a specific situation or conditions.
• This loan also provides suitable means for the seller to buy a fresh property before selling the present property.

The Cons:

• Interest rates on bridge loan is quite very high than a traditional long-term loan
• It also not designed for long-term loans.