Bridgerahoitus

Bridgerahoitus, also known as bridge financing or bridging loan, is a short-term loan used to cover a gap in funding until a more permanent financing solution is secured. This type of loan is typically used in real estate transactions, where a buyer needs to purchase a new property before they have sold their existing one. The bridge loan provides the necessary capital for the down payment or full purchase of the new property, with the intention that the sale of the old property will repay the loan.

These loans are characterized by their short duration, often ranging from a few months to a year. Interest rates on bridge financing are generally higher than those of traditional mortgages due to the increased risk and short-term nature of the loan. Collateral is usually required, often the existing property being sold.

Beyond real estate, bridge financing can also be utilized by businesses to cover immediate expenses or investments while awaiting long-term funding, such as venture capital or a business loan. It allows for continuity and prevents delays in crucial projects or transactions. The application process for a bridge loan is typically quicker than for traditional loans, as lenders focus on the borrower's ability to repay from the secured long-term financing or sale of assets. However, careful consideration of the associated costs and repayment terms is essential.