Bridge Loan

A bridge loan is a short-term loan used to provide temporary financing until a more permanent solution is secured. Often utilized in real estate transactions, it helps bridge the gap between the sale of an existing property and the purchase of a new one. Bridge loans typically have higher interest rates and shorter terms compared to long-term loans.

In loan management, bridge loans are valuable for managing cash flow and facilitating smooth transitions between financial obligations, but they require careful planning due to their higher cost and short repayment period.