Bridge Loan
Short definition
A bridge loan is a short, expensive facility used until permanent financing (take-out, asset sale, equity) closes. It is not a solution; it pulls the maturity wall forward.
Detailed explanation
Used for M&A, construction completion or expected collections. Margin and fees sit above the permanent pack; if the take-out (capital markets, asset sale) is uncertain, refinancing risk is concentrated.
Calling the bridge “done” is moving the wall to 12–18 months. Extension fees inflate all-in quickly.
Why it matters for the CFO
It funds closing cash but stresses DSCR and leverage caps early.
How to read it
Is the take-out committed or a market assumption? The latter is not a bridge; it is open risk.
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Definitions are educational. They are not investment, credit or tax advice.