bridge loan

noun

|Updated on: 28 May 2018

Definition of bridge loan

: a short-term loan used to finance an enterprise, investment, or government pending the receipt of other funds

See bridge loan defined for English-language learners

Recent Examples of bridge loan from the Web

Fractured condo sale Berkadia secured a $20.82 million bridge loan for ESG Kullen to purchase 145 units at Discovery Palms, a condo community at 12806 Madison Pointe Circle in Orlando’s Lake Buena Vista area.

— mary shanklin, OrlandoSentinel.com, "More than 700 homes to be built on 200+ acres of land next to Lake Howell in Seminole County," 20 Aug. 2017
The European Union is opening an investigation to see if Italy was within its rights to give struggling airline Alitalia a $1.1 billion bridge loan last year.

— Fox News, "EU probes Italian bridge loan to struggling Alitalia airline," 23 Apr. 2018
Italy has pumped 900 million euros ($1.1 billion) into the airline through bridge loans during the past year to keep it afloat.

— alessandra migliaccio, Bloomberg.com, "EasyJet Is Said to Approach Alitalia With Air France, Cerberus," 10 Apr. 2018
Italy has pumped 900 million euros ($1.1 billion) into the airline through bridge loans during the past year to keep it afloat.

— Fortune, "EasyJet, Air France, and Cerberus Are Said to Approach Alitalia About a Possible Takeover," 10 Apr. 2018
The company was able to secure a $45 million bridge loan from its parent, which is owned by Cerberus, to give it enough cash to make it to the bankruptcy in the first place.

— BostonGlobe.com, "Gunmaker struggled to find lender for bankruptcy financing," 29 Mar. 2018
CVS gathered $49 billion in bridge loans from 20 lenders in December as temporary financing for the acquisition, setting up for Tuesday’s transaction.

— molly smith, Bloomberg.com, "CVS Offers $40 Billion of Debt in Third-Largest Bond Sale," 6 Mar. 2018
Haywood's financing includes a bridge loan from Milwaukee Economic Development Corp., a nonprofit lender.

— morgan hughes, Milwaukee Journal Sentinel, "Milwaukee Mall's future is uncertain after developer buys former north side Sears," 13 Mar. 2018
But at the last minute, Pacifica got a $2 million bridge loan to pay off the legal judgment.

— ben fong-torres, San Francisco Chronicle, "FM pioneer KPFA’s near-death experience," 14 Feb. 2018

These example sentences are selected automatically from various online news sources to reflect current usage of the word 'bridge loan.' Views expressed in the examples do not represent the opinion of Merriam-Webster or its editors. Send us feedback.

First Known Use of bridge loan

1973

in the meaning defined above

See Words from the same year

NEW! Time Traveler

Financial Definition of BRIDGE LOAN

bridge loan

noun

What It Is

A bridge loan is a short-term, high-interest loan that provides a quick source of cash for commercial or individual needs. It is called a bridge loan because it serves as a bridge between one period of funding and another, more permanent source of funding.

How It Works

To illustrate, suppose a company has been approved for a $1 million loan from a bank. However, this money will not be available for six months, and they are running short on cash. The company could apply for a six-month bridge loan of $50,000 to cover their expenses until the money from the $1 million loan comes through.

Why It Matters

Often, businesses and individuals find themselves in need of fast funding during an interim period while they work out access to larger amounts of funds. The bridge loan essentially "bridges" the gap between when money runs out and when more money will be received.

The cost of bridge loans is often much higher than more traditional financing methods, and they are only meant to be used in special circumstances. If a company must rely on short-term, high-interest financing to continue operations, chances are good that the company is not viable in the long run.

Source: Investing Answers

BRIDGE LOAN Defined for English Language Learners

bridge loan

noun

Definition of bridge loan for English Language Learners

: money that a bank lends you for a short period of time until you receive the money that you are getting from another source (such as from selling your house)