Bridge Financing refers to a short-term financing tool aimed at providing temporary financial support to borrowers to bridge their liquidity gap before long-term financing or other expected capital inflows are in place. From a financial perspective, it is often seen as a transitional capital solution with high flexibility but also comes with high costs and risks. features: 1. Short term: The duration of bridge funds usually ranges from several weeks to one year, depending on the borrower's timeline for obtaining long-term funds. 2. Purpose of Funds: Mainly used to meet emergency or temporary capital needs, such as: -Real estate sector: When acquiring new properties, funds are advanced during the period of waiting for the disposal of existing assets or approval of long-term mortgage loans. -Corporate financing: the replenishment of working capital before the completion of equity financing, bond issuance, or bank credit approval. -M&A transaction: Provide necessary working capital before the completion of the transaction. 3. High cost: Due to its short-term nature, uncertainty, and the need for quick disbursement, the interest rate of bridge funds is usually higher than that of traditional loans, and may come with additional fees (such as handling fees or early repayment penalties). 4. Repayment guarantee: Lenders usually require a clear exit strategy, which means borrowers need to prove reliable repayment sources in the future, such as asset sales proceeds, long-term debt financing, or cash flow income. 5. Risk attribute: For lenders, bridge funds belong to high-risk credit products, so approval may require collateral (such as real estate, equity) or higher credit guarantees. For example: Assuming a company is waiting for a 100 million yuan private equity financing, but currently needs to pay 50 million yuan in supplier payments to maintain production. Enterprises can obtain this funding through bridge loans, with a loan term of 3 months, an annualized interest rate of 12%, and company assets as collateral. Once the private equity funds are in place, the company can repay the bridge loan. This financing tool is widely used in capital markets and financial practices, especially in time sensitive transactions or projects.