Bridge Loan
Private Equity glossary · Private Equity Fundamentals
Definition
Short-term financing intended to be replaced by permanent capital.
Bridge Loan in plain English
A bridge loan is money you borrow to get you across a gap in time — a temporary fix until the real, long-term money shows up. Think of buying a new house before your old one has sold: you take a short loan to cover the new place now, then pay it back the moment the old house sells. Companies do the same thing, borrowing quickly to close a deal today with the plan to swap that loan out later for permanent financing (like a bond or a proper long-term loan). It's fast and convenient, but usually pricier, because it's built for speed, not for the long haul.
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