Bridge financing, often in the form of a bridge loan, is an interim financing option used by companies and other entities to solidify their short-term position until a long-term financing option can be arranged. Bridge financing normally comes from an investment bank or venture capital firm in the form of a loan or equity investment
Short term loans or flexible ‘Bridging finance’ is secured via a legal charge on freehold and long leasehold property on either a first or second charge basis. Loans can also be secured on land, development sites or other personal assets such as Jewellery, Executive Cars and Works of Art etc. A first legal charge would be taken where no other borrowing is secured on the property or asset offered as security and a second charge taken where an existing lender is in place.
Property development finance is a short-term loan for residential property developments, such as refurbishment projects or construction, that is usually based on gross development value – ie what will the site be worth when the refurbishment or construction project is finished – that is then paid back in stages.