The term bridging loan, refers to financing needed for a temporary situation. No matter which sometimes offer some financial institutions to arrange for the possibility of bridge loans. There are several situations which may call for the formalization of a bridge loan, which can affect both private individuals and corporations. Among the typical cases we are: the purchase of homes under construction, acquisition of machinery, provision of guarantees, etc.. It is in all these cases, to obtain financing prior to the finalization of the loan that financed the operation definitely. As an example we consider two typical cases, one that affects individuals and other companies: It is common for individuals to purchase homes under construction, so that during the time of construction and to pick up the keys have to be paid a set of quantities, but they have mortgage financing. So through a bridge loan is to finance these amounts, and subsequently to the delivery of housing and timely execution of the mortgage, can again be included in the total amount of the transaction. It happens this way that the bridge loan is absorbed by the final loan associated with mortgage loans to housing acquired, and has achieved a total financing of the total capital to pay.
In the case of corporations, may acquire property, in which case the processing would be similar to that described, in addition it is increasingly common for the purchase of machinery or facilities, as constituting a request, an assignment made prior to the manufacturer , which must often be a considerable cash delivery, without which so far can be funded by a mortgage, since there is no machinery in charge. In these cases a bridging loan would cover those first deliveries funding, regardless of which later, after the timely processing of the mortgage, get the full funding of the operation. It is rare that the bridge loan mortgage rate is, in the absence of guarantees as well that, more often is that the case of consumer loans, short term and will be canceled at the time of finalization of the loan. Both the purchase of homes under construction, as in the purchase of machinery on order, which lead to monetary amounts in advance recourse bridge loan or not, it is important that the buyer requires two measures: a) Who the amounts paid in advance are guaranteed by any financial institution, so the possibility of fulfilling the contract by the builder or manufacturer, possible and easy to recover the investment. b) If you also going to use a bridge loan, which is designed and formalized for a specific time, the buyer should require a series of penalties, involving the payment of compensation by the builder or manufacturer to potential delays in the supply of goods from the manufacturer or manufacturer. In this way, would address the higher costs that may involve the formation of the bridge loan. As a supplement to the above, it would be advisable that the time for which formalizes the bridge loan, exceeds the time allowed for delivery of the goods, so any delays, are also provided and there is a funding gap .