Answer

What is a bridging loan and when is it used?

A bridging loan is short-term finance to cover a gap until longer-term funds or a sale come through. It's fast and flexible but priced for the short term, so it's for genuine bridges, not ongoing funding.

2 min read

Short-termBy design

Fills a gapUntil funds arrive

Priced highFor speed

What it means

Bridging finance covers a temporary gap — for example, buying stock or property before a sale completes or longer-term finance lands. It is fast to arrange and flexible, but carries a higher cost that reflects the speed and short term. It is meant to be repaid quickly from a defined source, the “exit”.

When it's used

It suits situations with a clear, near-term repayment source: an incoming payment, a property sale, or refinancing that's already in train. The danger is using it as rolling working capital, where the high cost mounts. For a recurring cash gap, a revolving facility is far cheaper. Compare in bridging vs a short-term loan.

What it means for you

Credicorp lends to your company, not to you personally, and takes no personal guarantee. See business loans or apply online.

Frequently asked questions

Is a bridging loan expensive?

It is priced higher than standard term finance because it's fast and short-term. That's fine for a genuine short bridge with a clear exit, but costly if it drags on. Have a firm repayment source before taking one.

What is the 'exit' on a bridging loan?

The defined way you'll repay it — a property sale, an incoming payment, or longer-term refinancing. A credible exit is essential; without one, a bridging loan can become expensive debt you struggle to clear.