A bridging loan is a temporary financial solution utilized until an individual or company secures long-term funding or settles an existing obligation. This type of loan offers the borrower a means to fulfil current commitments by delivering immediate liquidity. Generally, bridging loans carry relatively elevated interest rates and are often supported by some form of collateral, such as property or a business’s inventory.

A bridging loan can come in handy when you are trying to buy a new investment property and sell an existing one simultaneously. This short-term financing solution is designed to help bridge the gap between two transactions.