What does it mean to have a bridge of funds, and what does it mean to have a bridge of funds

Bridge funding is a type of short-term financing with a maturity of six months, which is a type of funding that is linked to long-term funding. The purpose of providing bridge funds is to meet the conditions for docking with long-term funds through the financing of bridge funds, and then replace bridge funds with long-term funds. Crossing the bridge is only a temporary state.

Generally speaking, a bridge crossing is a temporary turnover, and a bridge crossing fund is a temporary borrowed fund for the purpose of turnover. Generally, the term is relatively short, a few days, a few weeks, and a maximum of 6 months.

But the term "capital bridge" in the market now actually refers to the form of loan repayment by enterprises. When the working capital given by the bank to the enterprise expires, and the enterprise has no money to repay, it will find a third-party loan. The business starts by providing some basic information as requested by a third party.

The company explained that some businesses were mortgaged or guaranteed, and there were few employers who could do so. But it is easy for the bank president to issue a letter of guarantee, seal it, and sign it.

At the same time, the information submitted by the enterprise should indicate the repayment time, the full name of the repayment bank, the amount used, the number of days used, and the repayment**. After reading the information of the enterprise, the employer thinks that it is okay, and generally needs to file the declaration three to five days in advance. The time when the contract is signed is to pay interest first and pay later.

Some of the employees of the management will stay in the company and receive the three chapters of online banking from the company until the end of the business.

For example, a company borrows 50 million yuan from a bank for a period of 5 years. The bank needs your company to repay the funds at the end of each year before lending to you, but your money is already in operation and will not be returned for a while. At this time, you need a sum of money to help you knock it down, and the bank can approve the funds to you again.

All you have to do is return the money approved by the bank to the person who helped you cross the bridge. However, since the bridge crossing is usually a time period and the amount of funds is larger, the fee will be correspondingly higher.

It is the transit fund, a temporary relief fund used to tide over the difficulties.

In layman's terms, bridge funds are the meaning of advances. For example, investor A has borrowed 2 million from the bank, and 200,000 has not been settled, but at this time, capital turnover is required, and the bank requires that the first 200,000 yuan be cleared before he can borrow another 1 million.

So investor A will find the bridge funds, let it advance 200,000, and wait for the loan to be approved, and then return 200,000 to the person who advances the funds, during which the A investor will pay a certain percentage of the bridge fees, when the loan is approved, A investors are equivalent to financing 800,000, of which the 200,000 advanced by the advancer to A investors is called bridge funds.

When making an advance, the borrower generally needs to write an IOU, which indicates the borrower's name, ID card, amount, time of use, etc. In the financial market, the amount of funds rented by the bridge is relatively large, and the cost is higher than the interest rate of ordinary loans, so they are all short-term loans, and long-term loans are not cost-effective for investors who need to advance funds, and lenders are also worried about the safety of funds.

Bridge funds are a kind of financing of short-term funds, with a term of up to six months, and are a kind of funds that are connected to long-term funds. The purpose of providing bridge funds is to meet the conditions for docking with long-term funds through the financing of bridge funds, and then replace bridge funds with long-term funds. Crossing the bridge is only a temporary state.

The bridge fund and the guarantee loan fully demonstrate the leverage effect and guiding role of the financial funds, and have become the most direct and effective measures for enterprises to serve small, medium and micro enterprises.

Bridge fund features:

1 The term is short, usually not more than six months.

2. High gold content: For the operation of funds, it is very important for the user, playing a role of support and leverage.

3 High return on funds: Due to their importance, the returns given to fund providers are quite high.

4. The risk is easier to control: because the bridge fund is not a long-term occupation of the capital key split, but only a temporary need, often replaced by follow-up funds, so the risk is easier to control.

What does it mean to "cross the bridge" in finance?

The fund bridge can be understood as a kind of short-term capital financing, usually with a term of 6 months, which is a kind of capital that is connected to long-term funds. The purpose of providing bridge funds is to achieve the docking with long-term funds through the financing of bridge funds, and then replace bridge funds with long-term funds. Crossing the bridge is only a temporary state.

The capital bridge can usually solve the temporary financial difficulties of the enterprise, but such funds may need to pay more interest when they are used, and the return to the fund provider is quite high; Then there is the fact that the bridge funds are not occupied for a long time, and follow-up funds need to be replaced.

The basic process of fund bridging is to submit the application, accept and review, project evaluation, verification and approval, loan issuance, data archiving, post-loan management, loan collection and withdrawal; The borrower must submit detailed proof of information at the time of application, otherwise the bank will not agree to the imitation of the link.

After the enterprise borrows money through the bank, it must be repaid on time, and there can be no overdue situation, otherwise it will be quite unfavorable to the development of the enterprise. Moreover, after the overdue repayment, the bank will collect it, and it is not possible to borrow from the bank again in the future. In fact, when taking out a loan, the borrower can compare the interest charged by different banks.