Speaking of bridge loan, many friends may not understand it. As a short-term financing method, bridge loan is more common in enterprises. Bridge loan, also known as bridge loan, is simply a temporary or short-term loan provided by banks or other financial institutions to borrowers (such as real estate developers) who have obtained loan projects but have no funds to operate. The main function of bridge funds is to make up for the time gap when borrowers need financing. In this article, I will talk to you about bridge loan, especially the business processes and hidden risks. You can collect them first, and maybe you will use them later.

Bridge loan business process

I have explained the operation process of bridge loan among financial institutions in previous articles, and there are many introductions in this respect on the Internet. Here, I take an individual's application for bridge loan as an example to introduce the operation process of bridge loan in detail:

Suppose Mr. Wang has borrowed 300 thousand from the bank, but he still has 200 thousand to pay back, and now he needs a loan of 500 thousand If Mr. Wang directly applies for a loan of 500,000 yuan from the bank, he needs to pay off the previous loan before the bank can renew the loan.

At this time, Mr. Wang found a credit intermediary and needed a solution. The credit intermediary told Mr. Wang that bridge loan could operate. In other words, a credit intermediary gave Mr. Wang a loan of 200,000 yuan and asked Mr. Wang to repay the outstanding bank loan of 200,000 yuan first. Thanks to paying off the bank loan, Mr. Wang successfully obtained a loan of 700,000 yuan from the bank. Then we just need to return 200,000 of them to the credit intermediary and pay some other fees. The remaining 500,000 successfully solved Mr. Wang's urgent need.

For credit intermediaries, the 200,000 business here is bridge loan.

Characteristics of bridge loan

The term of 1. is short, generally within 6 months and not more than 1 year.

2. The return on capital is high, and the corresponding loan interest rate is also high.

3. The gold content is high, which can support and incite.

The common form of bridge loan.

1. Banks also borrow new funds.

2. Trade-in business generated by turnover within our credit line.

3 bill financing funds, including deposit for opening acceptance bills and deposit for opening letters of credit.

4. Asset bridge business

5. Real estate bridge fund business, including bridge business derived from premium payment and re-mortgage.

6. Reduce the size of the bridge.

Potential risks in bridge loan

1. The financing cost is high and the capital risk is high. Generally, the annualized interest rate in bridge loan is around 40.8%.

2. Enterprise credit risk

3. Moral hazard of bank employees

4. Aggravate the credit risk of banks.

To sum up, bridge loan is only suitable for customers who need cash flow in the short term. Moreover, the loan cost is often not low, and the borrower should know clearly before applying.