loan, including a real estate construction loan, used when the borrower is unable or unwilling to arrange longterm or permanent financing; generally arranged for less than three years. It is used to gain time for financial or market conditions to improve.
temporary, short-term loan made conditional on a takeout by intermediate or long-term financing. Also called bridge loan financing.
a loan, including a construction loan, used when the property owner is unable or unwilling to arrange permanent financing. Generally arranged for less than 3 years, used to gain time for financial or market conditions to improve.
Example: Monroe developed an office building but, in the expectation of falling interest rates, does not wish to use permanent financing at this time. He arranges a 2-year interim loan, during which time he seeks favorable permanent financing.
