Bridge Loan
A Bridge Loan is a short-term financing option that helps individuals and businesses manage temporary cash flow gaps until long-term funding becomes available.
Types of Bridge Loan
Below are the main types available in India
Business Bridge Loan
Helps business owners or MSMEs cover immediate financial needs such as inventory purchase, working capital, or vendor payments
Property Bridge Loan (Real Estate Bridge Loan)
Used by homebuyers or real estate investors to purchase a new property before selling an existing one.
Project Bridge Loan
Used by developers or contractors to fund ongoing projects until permanent financing or government payments are released.
Corporate Bridge Loan
Offered to large companies to meet short-term requirements like merger/acquisition financing, equipment purchase, or operational expenses before finalizing long-term capital arrangements.
Personal Bridge Loan
Helps individuals manage short-term personal or family expenses, such as education fees, medical emergencies, or property-related payments, before receiving expected funds.
Government / Institutional Bridge Loan
Provided to public bodies or government agencies for infrastructure or welfare projects pending fund release from central or state departments.
Why Is Bridge Loan Important?
Instant Liquidity
Provides immediate access to cash, helping individuals and businesses meet urgent financial needs.
Supports Business Continuity
Ensures smooth functioning of operations while waiting for receivables or long-term funding.
Enables Property Transactions
Helps property buyers avoid losing deals by arranging quick funds before selling existing assets.
Flexible Repayment Options
Bridge loans typically have short tenures (3–24 months) with multiple repayment structures like bullet or EMI payments.
Collateral-Based Security
Usually secured against property, shares, or other valuable assets, offering lower interest rates than unsecured loans.
FAQs
What is a Bridge Loan?
A Bridge Loan is a short-term loan designed to provide temporary financial support until permanent funding or revenue is received.
Who can apply for a Bridge Loan?
- Individuals purchasing property or facing short-term cash flow needs
- Businesses / MSMEs awaiting long-term funding
- Developers and contractors working on time-bound projects
What is the typical loan tenure?
Usually between 3 months to 2 years, depending on the purpose and repayment capacity.
How much loan amount can I get?
Loan amounts range from ₹5 lakh to ₹5 crore, based on borrower profile, collateral value, and purpose.
What is the interest rate for Bridge Loans?
Interest rates typically range from 10% to 18% per annum, varying by lender and borrower’s creditworthiness.