# Bridge Loan

*Corporate Finance & M&A — Finicade finance glossary*

A bridge loan is short-term financing that covers the gap until permanent funding arrives — typically underwriting an acquisition before bonds are issued. It's priced to be uncomfortable, with rates that step up over time, precisely so the borrower refinances quickly. Bridges that fail to be taken out are how banks end up holding hung debt they can't sell, as several did in 2007 and again in 2022.

**Also known as:** bridge financing, bridging loan

**Related terms:** [Revolving Credit Facility](https://finicade.com/glossary/revolving-credit-facility), [Mergers and Acquisitions (M&A)](https://finicade.com/glossary/mergers-and-acquisitions), [Term Loan B](https://finicade.com/glossary/term-loan-b), [Refinancing](https://finicade.com/glossary/refinancing), [Liquidity Risk](https://finicade.com/glossary/liquidity-risk)

Source: https://finicade.com/glossary/bridge-loan