Who Uses Bridging Loans

Bridging loan is a type of short-term loan used for various purposes, but the most common use for this type of loan is for real estate. The period for bridging loans ranges from two weeks to one year, and both individuals and businesses can use bridging loans. Normally, the interest rate for a bridging loan is much higher than other types of loans, but has benefits such as not requiring much documentation.

Most financial institutions are now offering bridging loans. These loans are the same as many others as they also require collateral securities to be provided to the lender to secure the loan. This type of loan is very useful for a business when they are faced with lack of working capital. They can be great for people who deal with real estate if they want to purchase a property but are waiting for an old property to sell. It allows people to carry on with their business and not allow it to fail.

Although long-term loans are available from most financial institutions, many business people only need a bridging loan, as they do not want to pay interests for a long term. It is true that business people always look for the short-term whatever they do in business. It is this state of mindset of business people that made the financial institutions think of facilitating the need for short term loans like bridging loans. This has actually made real estate owners more efficient in their business and more new entrants have entered into the market as their capital base can be enlarged with such loans.

This entry was posted on Friday, August 24th, 2012 at 11:47 am and is filed under Uncategorized. You can follow any responses to this entry through the RSS 2.0 feed. Responses are currently closed, but you can trackback from your own site.

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