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A bridge loan by definition is a short term loan that attempts to “bridge” the finances of a person when there is a gap between expenditure and income. It is usually a personal loan obtained when an individual is struggling with his budget, but in some cases can be obtained for business purposes as well. This is true especially in cases where working capital financing may be required for an upcoming boom period or when the company is cash-strapped.
Since these are short term loans with usually high interest rates, some sort of collateral is always required to ensure the creditor does not lose out on his principal amount at least.