Bridge loan is also known as bridge loan. After obtaining the loan project, financial institution A was unable to operate due to the temporary shortage of funds, so it consulted financial institution B to help distribute the funds. After the funds of financial institution A arrive, B withdraws from bridge loan. This kind of loan is called bridge loan for B.. In China, financial institution A mainly plays the role of policy banks such as China Development Bank, Export-Import Bank and Agricultural Development Bank, while financial institution B mainly plays the role of commercial bank.
Generally speaking, bridge loan is a short-term loan, which belongs to a transitional loan. Bridge loan is an effective tool to directly capitalize buying opportunities, and bridge loan's greatest advantage is its quick recovery. Bridge loan has a short term of no more than one year, and the interest rate is relatively high. It is mortgaged by real estate and inventory. Therefore, bridge loan is also called bridge loan, bridging loan, gap loan or revolving loan.
Bridge loan abroad usually refers to intermediary bridge loan.
Short-term loans provided to meet the capital needs of its service companies before arranging more complicated medium-and long-term loans. For China securities companies, bridge loan refers to the working capital loans provided by banks to pre-listed companies or listed companies, that is, pre-listed companies issue new shares or shares of listed companies, and the issuance plan has been recognized by the relevant state securities regulatory authorities. Because the raised funds are still insufficient, in order to solve the temporary normal capital demand, we apply to the bank, and the distributor with legal person qualification will provide a guaranteed working capital loan. In addition, bridge loan can also be used to meet the short-term financing needs of the acquirer before the merger.
In the field of real estate finance, the bridge loan mechanism is also widely used in the financing of developers. After the developers get the land in the auction, if they don't pay the land transfer fee in full, they can't get the state-owned land use right certificate, so they can't borrow money from commercial banks through mortgaged land. Therefore, using the bridge loan mechanism in the financial field, developers can borrow money from non-bank financial institutions to pay the land transfer fee, and then mortgage the land to commercial banks to pay this part of the bridge loan, forming a structure of robbing Peter to pay Paul.