A look at the advantages of bridge loans

In the world of finance and investment, bridge loan comes into mind when a person or a company wants a temporary loan to “bridge the gap” between times when financing is needed. It is a short-term loan that allows users to meet current obligations by providing immediate cash flow.

Viewed as a loan anticipation plan, bridge loans are gaining in popularity these days because of its many benefits compared to other types of loans, such payday loans and advanced fee loans.

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For one’s enlightenment, here are some of its advantages:

Strictly short-term. Borrowers typically opt for bridge loans due to its short term structure. It provides people and companies the funding they need until they are able to obtain long-term financing from capital markets or takeout. Although interest rates tend to be higher, bridge loans are often manageable for most organizations since it is designed to be repaid in full by the time long-term form of financing is secured.

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Flexible repayment options.Depending on the contract, most lenders provide borrowers the opportunity to choose a repayment option that is suitable for their ability to pay on time.

Time saver. Those buying a home but haven’t sold their existing home yet can directly put a home on the market without restrictions, which does not require monthly payments for a few months.

Like any other types of loans, a bridge loan involves high stakes for borrowers and lenders. Those planning to acquire this type of loan must have an understanding of the right timing, structure, terms, and range of outcomes under a bridge loan commitment.

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Tony Hartman, a Denver, Colorado-based finance expert, is the senior managing partner at Mark Private Capital LLC, a company that specializes in bridge financing for business and real estate opportunities. Learn more about him by visiting this Google+ page .