Description
A bridge loan is interim financing for an individual or business until permanent or the next stage of financing can be obtained. Money from the new financing is generally used to "take out" (i.e. to pay back) the bridge loan, as well as other capitalization needs.
Bridge loans are typically more expensive than conventional financing to compensate for the additional risk of the loan. Bridge loans typically have a higher interest rate, points and other costs that are amortized over a shorter period, and various fees and other "sweeteners" (such as equity participation by the lender in some loans). The lender also may require cross-collateralization and a lower loan-to-value ratio. On the other hand they are typically arranged quickly with relatively little documentation.
Read more about this topic: Bridge Loan
Famous quotes containing the word description:
“To give an accurate description of what has never occurred is not merely the proper occupation of the historian, but the inalienable privilege of any man of parts and culture.”
—Oscar Wilde (1854–1900)
“As they are not seen on their way down the streams, it is thought by fishermen that they never return, but waste away and die, clinging to rocks and stumps of trees for an indefinite period; a tragic feature in the scenery of the river bottoms worthy to be remembered with Shakespeare’s description of the sea-floor.”
—Henry David Thoreau (1817–1862)
“The great object in life is Sensation—to feel that we exist, even though in pain; it is this “craving void” which drives us to gaming, to battle, to travel, to intemperate but keenly felt pursuits of every description whose principal attraction is the agitation inseparable from their accomplishment.”
—George Gordon Noel Byron (1788–1824)