Difference Between Bridging Loans and Bridging Finance

25 Jan

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Practically everybody calls for a loan at a single time or an additional. But there are a number of various kinds of loans that you can pick from. If you have been advised bridging loans or a bridging finance, you have to know the distinction between them. So here goes.

Bridging finance is normally supplied to significant contractors like home developers who will get typical infusions of cash from clients who have purchased house from the developer. That means, bridging finance can aid a developer full his project with money from the bank whilst being reimbursed by buyers. These loans are far less risky for the lender as the house developer or borrower will get a assured income from buyers. The rate of interest is reduce also and the lender knows that there is home attached to the loan which can be used as surety in situation the borrower does not pay.

Apart from house developers, residence owners who are arranging to sell a house and buy a new one particular can do so with bridging finance too. The bank will advance the money for a reduce interest rate than marketplace rate to get a new residence while they wait for the payment from selling their own residence. The actual time for the bridging loan will differ according to the terms set by the bank and the borrower. The identical procedure is also employed by stock offering companies and bond dealings. There are a lot of varieties of bridging finance bargains in the market but hey can usually be divided into closed and open bridging. Terms of these loans vary only for the closing dates of the loans.

are brief term loans that are offered to consumers for 2 weeks to 3 years. These short terms loans can be extended to businesses or individuals. Prices of interest even so for these loans will be considerably higher than the market place rate to allow the lender to recover expenses. There is also an extra risk to the lender since of the short term of the loan. Most lenders will demand a credit examine to make sure that you are financially fluid, cross amortization, and they will also set a lower loan to value ratio to guard themselves and their investment. You can close these loans more quickly but there will be a essential payoff after a certain period of time. The most frequent variety of bridging loan is offered by banks to new organizations. These loans will tide over cash flow issues and they can be returned and closed when the difficulty is solved.

43 Responses to “Difference Between Bridging Loans and Bridging Finance”

  1. Lane February 6, 2013 at 2:49 am #

    From what I can tell, trade surpluses are good because it means we are taking in more foreign currency than we are paying out to fuel our economy; and trade deficits are bad because it means we are paying more out than we are taking in. Being a U.S. citizen, my country has the worst trade deficit of all the countries; and it isn’t even close to the next worse which is Great Britain. This is supposed to contribute in part to our national deficit as well.

    However, part of what effects the whole trade surplus and deficit equation has to deal with exchange rates as well. If our dollar appreciates (meaning it increases in value), it will cause a trade deficit; because it means that foreign countries would have to pay more for our goods, and therefore would buy less. Then the opposite holds true for a depreciating dollar, where it would cause a trade surplus because our goods become cheaper.

    This is where I’m a bit at a loss. I may not be understanding the principle quite right; so if I am having a concept error in there, please help me correct it. It just makes everything seem it contradicts.

    Common sense thinking suggests if our dollar is worth more, we can buy more with less currency. If it is worth less, we will need more currency to buy the same hypothetical amount of goods. Being a trade surplus is a result of a depreciated currency; wouldn’t that too cause an increase in national debt? I mean depending on the the rate of depreciation a $1 million dollar bridge today could wind up costing $2 million dollars tomorrow. So spending would have to go up if we were to maintain normal operations, which would lead to higher national deficits; unless of course we cut back on government work and projects to offset the increase in costs for doing the same amount of work and purchasing the same amount of resources. Also, if we are borrowing money to a pay these bills; wouldn’t the loaner want back the actual value of what they loaned back, plus interest? Lets say the value of the dollar drops to half of what it is today in a year; and China loaned us $1 trillion dollars today with a 10% APR interest rate. If we paid them $1.1. trillion a year from today, would that be good? China just took a $450 billion loss on the initial loan if you are looking at sheer value and purchasing power of the initial loan amount versus the depreciated value a year later.

    With all of that said, I want to understand how depreciating an exchange rate in order to increase net exports and possibly cause a trade surplus to be good for a national economy? Because it doesn’t seem to make sense, it seems like it would be bad (to depreciate the exchange rate).

  2. Anibal February 10, 2013 at 5:29 pm #

    I’m trying to go study abroad for the Spring semester and am realizing I need a loan bad. The program I am going to do is 9,000 dollars, I know financial aid will cover like 2000, and probably with scholarships like 2000 more, so that still leaves 4,000 left! I will be needing spending money as well, so at least 2,000 more so I would be needing about 6,000 in total. Has anybody tried these Astrive loans, how does it work, anybody else had to study abroad and used a loan to help pay for it?

  3. Thanh February 12, 2013 at 11:34 am #

    My mum decided we were moving, she has quit her job, told the landlord we are moving out, I applied to a new college and my sister for a new school, and I told everyone again. (she has done this before)

    Last night she talked to our neighbour and now we’re not going because she talked my mum out of it. She was saying you have to be 100% sure – which I think is total bull, our neighbour is a very determined person who once she gets an idea in her head will not let it go, but my mum is just not like that.

    I don’t know whether I’m coming or going, I’m delaying telling my friends I’m not going because I’m not sure if she’s going to change her mind again. I’ve not been doing my summer bridge work because I’ve been thinking I’m going to a different college so it doesn’t matter. And to top it all off we will be without a house and my mum will have no job by the end of the month.The real reason why she changed her mind and she told me this is because she doesn’t get along with my nosy nan, but it’s cheaper there and now she’s quit her job we definitely have no money. 

    What the hell am I supposed to do? It’s humiliating at the very least, discounting the looming poverty, giving first impressions of a slacker to my new teachers and not being sure if I’m going to be whisked off somewhere else in ten minutes time. I’m 16, I shouldn’t have to be worrying about my mums finances and where we’re going to live. 
    P.S. our neighbour, whilst being a very nice person and a responsible parent to her kid, spends most of her time smoking marijuana on her back porch. 
    @Silas G. Thank you very much for answering, but I’m too pathetic to join the military (I am a woman and not even a physically strong one) and I live in England, our college is different. I am sixteen years old, I turned sixteen the day before I left school (that’s when school finishes here) and I can’t get a degree until I’m eighteen, so the only job I can get is stacking shelves or something,

  4. Alayna February 12, 2013 at 4:41 pm #

    The average American. It wasn’t the fat cat CEO’s that caused this it was the people that took out so many loans that if one person lost their job they could not pay all their bills.

    Everything the fat cats have done wouldn’t matter if the people were not so far in debt that they could not make it on unemployment till they find another job.

    I have never been in debt. I paid cash for my first car and house and every car and house since. It isn’t hard and I started with nothing.

    I did not catch any break that was not easily available to any other American, I just worked harder and was more responsible with the child having.

    Why should everyone have to suffer because some people bought things they could not afford. It just makes me sad to think about it.
    The republicans tried to stop the sub prime problem before it got too bad but the dem ran congress shot it down very quickly. Bush JR of all people warned of it. The way I hear all the card carrying dems talk about how stupid he was if he saw it coming what does that say about your leaders.
    Plus nobody ever convinced me to take out a loan. I have never been in debt in my life so you would have to be at least dumber than me to take out a loan you couldn’t afford.
    I’m sorry Dimunitive Juarez Griffin but the republicans had control of both houses once under bush and once under clinton and that was it. You really can’t blame this on them because hey they tried to fix it and well if it bothered the dems that bad they could have fixed it whenever they chose they ran the house and senate at the first of Clintons first term the first of his second and everything after the second half of bush’s first term.

  5. Merrill February 19, 2013 at 10:45 pm #

    Braces can’t fix it. It’s really expensive to have it fixed by oral surgery. If it’s ignored for too long it could lead to heart disease later on. Should I wait or find a way to finance it?

  6. Nickolas February 22, 2013 at 3:29 am #

    Im looking how to get a procedure done at a Dental School in PA. How do I go about this? This is because my finance was in a car accident and lost some teeth she wants something permenant but her insurance wont cover it. Can any one help?
    She was in an accident when she was younger and her parents had no insurance. She currently has the retainer with the fake teeth. She hates it.. how much could I expect to pay at a dental school. Shes need a maryland bridge for it to be permenant right??

  7. Hana February 24, 2013 at 9:02 am #

    We bought a house, and used the funds from the sale of our previous house to pay for it. however we had to bridge finance our home, and the lawyer short paid the bank. now they won’t answer calls or letters to explain what happened. what can we do?

  8. Gavin February 24, 2013 at 7:39 pm #

    I have my current house up for sale but no buyer yet. I’ve found my dream home and have secured finance to buy it but I only want to own 2 properties for as short a time as possible. Should I just go for it or should I be more cautious because the property market is in a bit of a slump right now? I live in East Sussex if you think location matters.

  9. Noemi February 25, 2013 at 2:06 pm #

    I’m driving my car into Mexico from the US and want to know how long it takes to actually get the car permit once all the documents have been submitted. Do they give it out the same day? I’m bringing a financed vehicle along with a notarized letter from the leasing company.
    This can be done at any Mexican Consulate?
    mrcdkid, when you say select Mexican Consulates, does this include the ones in major cities? Like NYC, LA, Chicago, etc?

  10. Isidro March 5, 2013 at 12:34 pm #

    I’m in the medical field with an associates degree. I plan to bridge to a bachelors degree starting in the fall. My tuition for the program is $15K.

    Just curious to know how you are paying for college:)

  11. Nettie March 28, 2013 at 10:00 am #

    which industries profited the most from WWII and the reconstruction that followed? how this was financed and then who reaped thed profits and how?

    and which percentage of central and eastern European cities were at least 50 percent demolished or damaged? how this percentage was more for central europe than eastern europe and why, how?

    why this only occured in Central and Eastern Europe too mostly? (no french cities were really harmed,,nor spain or italy, etc.) and why Vienna escaped too without too much damage? is this true?

  12. Jeannine March 28, 2013 at 3:02 pm #

    Jobs that would be created include:
    a-construction
    b-concrete plant workers
    c-asphalt plant workers
    d-equipment manufacturers
    e-truck drivers
    f-truck manufacturers
    g-painting companies
    h-bridge repair companies
    I-tire manufacturers
    j-tire repair companies
    k-roach coaches and their employees

    Along with many other needed jobs, I am one conservative who thinks it would be good if it is not loaded with Pork.
    Our highways are crumbling and our bridges are collapsing.

  13. Isaias March 29, 2013 at 6:23 am #

    He wants to spend a trillion dollars on roads and bridges? But he doesn’t want anybody to drive cars and trucks. So who is supposed to benefit from all these improvements?
    But the “New Deal” didn’t have a bunch of green weenies attempting to stop the use of oil based fuels like we have now. What’s going to power the Caterpillars to do the roadwork? What’s going to power the trucks to move the supplies? What’s going to power the vehicles that use the end product?

    It sure ain’t gonna be the EverReady Bunny!

  14. Rossie March 30, 2013 at 8:12 am #

    What percentage of domestic government spending is returned to the government in the form of taxes? The federal government spends a $billion on a new bridge and highway system. All the workers and contractors involved will pay taxes on their earnings, plus they will spend their earnings purchasing products and services from vendors who will pay taxes on their earnings. It just keeps going once the economy is stimulated by the government spending.
    Is there a formula that determines what percentage of government spending is returnable?

  15. Darrick March 30, 2013 at 11:27 pm #

    If you ask a venture capitalist to finance your business, do you still have to pay back the money they loaned you? I’m assuming yes but just want to make sure.

  16. Bobby March 31, 2013 at 7:51 am #

    In the Keys just past the Seven Mile Bridge are 2 small islands called the Spanish Harbor Keys. Off one is what seems to be a quarry of some type that is now popular for fishing, snorkeling and diving. I haven’t been able to find out anything about this online. Does anyone know how old it is? What it was used for? How deep it is? I am very curious! Thank you!

  17. Mark April 1, 2013 at 2:41 am #

    We are kinda in a financial struggle like everybody else in this world and my husband heard or read some where that when you deploy over seas with the military you are able to put a freeze on your finances until you get back. Can someone put a little clarity into the subject. Thank you

  18. Vincent April 1, 2013 at 11:18 am #

    strangers?

    Owing money to yourself to finance roads and bridges isn’t so bad an idea, if you like roads and bridges.

    But they decided to stop saving money and borrow from China.

    Maybe it has something to do with nobody expcept the few getting a raise since 1985 and having to borrow money themselves to live.

    Thanks Reagan

  19. Nick April 3, 2013 at 3:22 am #

    We do not want to put a modular home up. We figure if we are going to put a home on the property we want it to last us. There used to be a modular on the land so the basics are already out there. Or should be. We live in Southern NC, what cost will this be, how do we go about finding builders, What are some issues we may not think about. How can you get it financed?

  20. Joyce April 5, 2013 at 1:08 pm #

    I’m getting Delta Dental PPO on Feb. 1. I need five crowns and two bridges. How much of that work can I get done under coverage?

  21. Jenell April 7, 2013 at 5:45 am #

    I checked the 2009 status, and right now they seem to be Accounting, Management, Finance/Economics, Computer Sciences, Mechanical Engineering, Marketing and IT Management.
    Do you think this will continue, and if so, for how long?
    Do you think the world’s situation will change enough, at a point in the near future, to cause a wholly different demand in skills?
    Do you think there will be a higher demand for degrees in environmental studies/sciences and ecology?

  22. Donovan April 9, 2013 at 8:40 am #

    i like physics and somewhat like math, and im really interested in engineering. however im also into finance and investing. ive been reading books on investing even before i turned 15. because i can self educate myself in finance, i see it as unnecessary to study in college, so i think ill go for engineering. im wondering if i do enginering can i study finance in grad school? thanks.

  23. Elanor April 10, 2013 at 4:08 am #

    During the summer we completed the purchase of a new home. Our existing home which is in move in condition in a great area and being marketed at a competitive price has failed to sell because of the time of year and for no other reason. We are now committed to buy the other home however the sub prime mortgage market has collapsed in the meantime meaning that raising the bridging finance is proving next to impossible. We have 3 weeks to raise 150,000 pounds (I am in the UK). Our IFA is working hard to find a suitable mortgage product but the changing market conditions are making this very hard. We have no rich relatives. The issue is mostly that we were going to borrow on the 200K+ equity on our existing home self cert to do the bridge but the loan to value available has been dropped dramatically as lenders play safe, leaving us stuck with a problem in the meantime. Help! What is the quickest way to raise this money?
    Can I just emphasise that I am in the UK, so need a loan in sterling. Also anyone who replies offering finance but without a phone number and website and some means of verifying themselves will be ignored.

  24. Tangela April 12, 2013 at 5:06 pm #

    I have a lot of trouble keeping track of certain things, and I lose stuff very easily. This may be a concern when I’m older because I need to gain responsibility, and start pushing myself more. I know that everyone looses things, but it’s very hard for me, because I lose things without noticing.

    Also I have high-functioning autism, which may impair my abilities to live independently. My parents tell me that they do not know if I’ll be able to live independently, but based on what they know about me, this is what they think. They think that I can live independently if my parents can check on me regularly to see if I’m able to use my finances, cook my own meals, and not feel homesick. But without the family support, they fear that something bad can happen for me.

  25. Shantay April 23, 2013 at 8:22 pm #

    Currently, I hold a 3.08 Actual GPA and 2.9 accumulative GPA in my finance program at George Brown College. I looked up both university and found out that York University wants a 3.0 accumulative and Ryerson wants a 3.2 GPA actual and accumulative GPA. The thing is my rubric of GPA is different from the university’s rubric. George Brown 3.0 stands for a 76% average whereas both university’s 3.0 GPA stands for 70% average. I clearly have a higher average then what is required but do they even go by the percentage? Also I heard that York University is easier to get into for some reason and I just want you feedback if it’s actually true. I also heard that I have a better chance of getting accepted if I apply for part-time then go full-time? Lastly I just wanted to know if there is any other way I could get into these university with a higher chance of acceptance?

    *My 3-year diploma is a year bridge program to Ryerson

    I know I am in the wrong section but nobody is in the educational section… and im kinda desperate for answers 🙁

  26. Gavin May 30, 2013 at 10:23 pm #

    I live in New York and I am trying to find an entry level finance position in the Carolina’s, Should I ask these companies to fly me out their? I want to find a job, but who is expected to cover the expenses? I know that they can just as easily hire someone in their city already, but I am a better candidate?

  27. Benny June 9, 2013 at 5:09 pm #

    Hi, I work in Finance and have a potential offer at one of the banks in Jersy City. I live in Staten Island and when I went for my interview I get lost around all the construction and rerouting that’s going on there. Anyone knows what the easiest way to get there? Is there any Bus route? Or maybe a commute to somewhere and transfer to a train or something? I’d appreciate all feedbacks.
    thanks in advance

  28. Jarred June 9, 2013 at 5:09 pm #

    what are the sources of finance available for the funding of a typical construction project?

  29. Leroy June 16, 2013 at 2:41 am #

    I understand sales in consumer products where there is a tangible product, but in Investment banking what are they selling? and how do they sell something intangible. Please help I am a student interest in the sales field as a whole, and may be interested in the finance sales field.

  30. Harley June 17, 2013 at 10:09 pm #

    I have a bridge to sell you.

  31. Chauncey June 18, 2013 at 1:55 am #

    In History Channel’s The Men Who Built America, (a channel I love because unlike BBC and Discovery, it’s more daring and answers questions your history teacher might deem silly, and is even willing to show wild shows like Duck Dynasty, they’re really a wildly diversified channel) they said that steel was just once used to make spoons and jewelry, when Andrew Carnegie built the Eads Bridge connecting the Mississipi River, he built the first massive man-made structure made out of steel, which back then was never done before. Is this true? If so, why is Andrew Carnegie not credited for this?

  32. Evelyne June 19, 2013 at 10:16 pm #

    WHATS the approx cost for a rhinoplasty procedure where i need a higher nose bridge than what i have now? I live in Southwestern Ontario, Canada. Also have you had this procedure done? Did anything go wrong?

  33. Roscoe June 26, 2013 at 4:06 am #

    I want to buy another home, move, & then sell my old home. Are there ways to finance the new home using the equity of the old home to secure the loan?

  34. Sana July 26, 2013 at 2:06 pm #

    We should be going after known al qaeda members, but what does it take to invest in our own country. With the bridge collapse in MN and 8 Aug 07 flood of downtown Cleveland after heavy rain, officials say that drainage and road conditions are outdated, yet we pump millions into Iraq and other countries that may or may not be our allies in a few years, and may even be hostile to the US in the future. What are the longtime benefits in Iraq going to help with if our country here is fallling apart today… Literally

  35. Darrick July 27, 2013 at 7:43 pm #

    according to the media.

    Now it turns out that holiday sales haven’t been this bad in 4 years.

    http://finance.yahoo.com/news/retail-sales-creep-higher-weak-holiday-season-early-143749277–finance.html
    Not really booming but the media made it sound like we were rounding the corner into prosperity.

    Then again, the media has been talking like this for the last 2 years.

  36. Deanne August 23, 2013 at 8:00 am #

    A friend of mine is the editor-in-chief of a new psychotherapy journal which is just releasing its premier issue.

    I’d love to come up with some good ideas for publicizing it, for increasing awareness about it, and for generating some excitement about it. I’ve come up with some ideas (publishing party, send out announcements to all similar institutes, etc.) but I’m sure there are a lot that I just haven’t thought of.

    The journal is a professional, peer-reviewed journal. It’s oriented toward gestalt therapy (a particular modality of therapy), with a theme of “building bridges” to other types of psychotherapy.

    How can we create some interest and excitement? How can we capitalize on the one-time-only event that the first issue represents? How can we create interest, increase the readership, and get people excited about participating in future issues?

    Any and all suggestions will be greatly appreciated!

  37. Arnold August 25, 2013 at 10:35 am #

    We cannot afford 2 mortgages but love the bank owned home. They of course will not accept contigency offers. Is a bridge loan a good idea or are there other financing options out there? Or do we just be patient and wait until our home sells and possibly miss out on the deal? Thanks!

  38. Valentine August 26, 2013 at 3:23 am #

    The loan is for buying a new home (as a kind of bridge financing). I’m using the proceeds of the sale of my current home to repay him.

  39. Norris August 26, 2013 at 7:45 pm #

    We purchased a new home and have already sold our current home. There is a 2 week gap between when we take over our new home and when the new owners take over our current home. What should I expect with regard to the bridge financing and interest rates?

  40. Merle August 27, 2013 at 8:14 am #

    I need to finance my food based start up business, I need opinions on what way you think is the best way to finance. My two ideas are either I borrow the funds from the investor and pay them back thru a structured payment plan or offer up shares in the business. If you could provide your opinion and information on why you feel that way. If you have a valid / creative idea for securing the funds, please enter your idea.

  41. Jacquline September 3, 2013 at 5:24 am #

    What I mean by this is, how do I transform my train of thought? Finance? Culture?

    I just need any information that I “should know”

    About Germany and Australia, thanks very much

  42. Annett September 20, 2013 at 6:12 pm #

    Is that if the car is a total loss, Gap Insurance pays the difference between the motor insurance settlement and the value of your car.

    My query is that do I still get a 2nd new car and do not have to pay for it myself.

  43. Jong September 24, 2013 at 1:29 am #

    I understand that bridge loans help companies get to a new stage of financing, but what are the core differences. Do bridge loans have higher interest? More risk? Etc..

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