Bridging Loan
Your short-term financing solution
A bridge loan is short-term financing used to stay afloat while waiting for other funding with more favorable terms to come through. If you knew you had a high expectation of receiving a loan in the next few months or were waiting to close a round of funding, you might use a bridge loan until you received the funds from the new deal.
Bridge loans may be paid back in terms anywhere from 3 – 18 months and typically have daily or weekly payments. However, a bridge loan could be a good option if you just need the cash in the short-term and will soon be getting a more permanent source of funding.
| Bridging Loan (Sales Proceeds) | Bridging Loan (Credit Facilities) |
|
|---|---|---|
| Property | Residential, Commercial & Industrial | Residential, Commercial & Industrial |
| Profile | Owners who just sold their properties but need fast access to the sales proceeds before the usual 3-month completion period. | Owners who just accepted the Letter of Offer (“LO”) from a private lending institution but need immediate access to the cash-out term loan facilities prior to the completion of the legal conveyancing process (typically about 4 to 6 weeks). |
| Purpose | Funds are used mainly for settlement of their immediate personal debt obligations with the banks, IRAS, MSCT &/or other unsecured creditors in order not to delay completion of the property sale. | For their business working capital or personal use. |
| LTV | Up to 80% of expected sales proceeds to be received by the owners. | Up to 90% of the fresh cash-out term loan facilities. |
| Disbursement | Within 3 working days from loan approval. | Within 3 working days from loan approval. |
| Loan Tenure | Up to completion date of property sale. | Up to loan disbursement date. |
| Others | Loan & Interest are to be fully repaid only on completion date. | Loan & Interest are to be fully repaid only on loan disbursement date. |