Bridge financing
Most of the people have experienced situations when a payout was delayed because an expected income failed to arrive. This might cause financial inconveniences such as default fees or delayed payment penalty. Sometimes a good business opportunity could be lost simply because of liquidity problems.
The solution for such problems is the bridge financing option, it is mainly used to retain liquidity while waiting for a considerable income in cash or as a transaction. It is mainly used to tackle the financial gaps resulting from a set period of 30 or 90 days for your debtor to pay, while you want to use your money. It is often used when buying a house, which you have to pay immediately or within a short period of time while you are selling or waiting for the buyer of your own house. As the gap is usually a few week, it would be unreasonable, and probably financially unfavourable, to take out a loan for this short period. A bridging financing would cover the price of your new home for the gap period.
This type of financing is usually available at banks or other large financial institutions and used, besides individuals, also by some companies and large firms to cover financial operations with high liquidity needs.