Define: Bridge Loan

UK Accounting Glossary

Definition: Bridge Loan



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Full Definition of Bridge Loan


A bridge loan is a temporary source of financing intended to last only until more permanent financial arrangements can be made. A bridge loan is usually for a year or less, often much less. The bridge loan is very common in two arenas, start-up finance and real estate. A start-up anticipating receipt of venture capital might seek a bridge loan from the VC partner(s) to meet operating needs until the deal closes. In this case, only the venture backers would risk making the bridge loan. In real estate, a bridge loan is easier to obtain because it will generally be secured by title to property. A common bridge loan scenario for the individual homeowner is when a buyer wants to purchase a new property, but cannot qualify for a new mortgage because of an existing mortgage. If the current home is not yet on the market, a bridge loan is a last resort financing option. Once the existing home is sold, the buyer can qualify for a mortgage and repay the bridge loan.


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Bridge Loan. PayrollHeaven.com. Retrieved April 03, 2020, from PayrollHeaven.com website: https://payrollheaven.com/define/bridge-loan/

Definition Sources


Definitions for Bridge Loan are sourced/syndicated and enhanced from:

  • A Dictionary of Economics (Oxford Quick Reference)
  • Oxford Dictionary Of Accounting
  • Oxford Dictionary Of Business & Management

This glossary post was last updated: 4th February 2020.