Bridge Loan Facility

accommodation loan

Type of bridge loans and their comparison with alternative loans Paxton Private Finance partners David Kinane said: "There are two major kinds of bridge loans: a "closed bridge" and an "open bridge", and each has significant inequalities. Loan is a'closed bridge' loan in which the debtor takes out a pre-defined and scheduled way out to pay back the loan before taking out the bridge loan. "In this case, the debtor knows that a money supply will be available to pay back the loan before maturity," Mr Kinane states. It states that an open bridge loan may be necessary if the debtor has to complete a deal in a very tight timeframe and has not had the means to organise the financing.

"It may also be the case that the intended withdrawal of the debtor from the bridge loan takes place through the disposal of the real estate, a path that has recently been increasingly chosen due to the absence of long-term financing arrangements from the banking sector. Brightstar Financial's Rob Jupp, CEO of Brightstar Financial, emphasizes that current account credit and short-term investment financing are alternative ways to bridge credit lines.

Mr Kinane added that recently an increased number of long-term creditors have entered the short-term markets "while there is also the alternative of supporting a deal with privately owned companies". However, they can be costly and often give the borrower some degree of ownership over the deal.

Enterprise Finance Chief Executive Officer Danny Waters says the bridge loan is a truly exceptional offering that does not have similar offerings on the board that are just as agile and on time. Like all financings, agents must understand the needs of their clients and offer appropriate financing solutions. Guidance must be built on the client's capacity and intention to pay back, an appreciation of the type of facility provided and best and worst case scenario in the case of non-repayment or refinancing.

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