What is the meaning of "crossing the bridge" in private lending? Who can give me an example in detail? Thank you very much

"Crossing the bridge" means "crossing the bridge", which is a short-term funding arrangement for short-term loans to achieve the purpose of transition to long-term funding arrangements. The specific "bridge crossing" can be explained by bridge loan and bridge crossing funds.

Bridge-crossing funds are completely a short-term financing behavior of enterprises, and the source of bridge-crossing funds may be financial institutions or other enterprises. For example, if an enterprise wants to acquire an enterprise, or invest in a project, or introduce a sum of money, it will seek short-term financing from financial institutions or other enterprises in order to meet the requirements or meet some conditions.

Generally speaking, the term of bridge-crossing funds will not exceed 1 year, only for short-term financing or borrowing, to achieve the connection with long-term funds. The purpose of borrowing bridge-crossing funds is to meet certain conditions and realize the docking with long-term funds, and then replace the bridge-crossing funds with long-term funds, and the bridge-crossing funds will be withdrawn.

For example, enterprise A borrowed RMB 1 00000 from China Construction Bank on June 20 17, with a term of one year. One year later, on May 3, 2065438, the loan was due. At this time, there are problems in the operation of enterprise A (for example, accounts receivable are not recovered in time), which leads to insufficient funds in the returning bank.

A goes to the funded enterprise B and asks him to pay100000 yuan and return it to the bank; Then the bank renewed the loan of 6,543,800,000 yuan to enterprise A, and then A returned the money and the interest on the number of days of use to enterprise B, which is called bridge loan. For banks, loans are still normal. For A, it avoids bankruptcy or risk classification reduction. For B, it earned a lot of interest, and the three won each other.

Extended data:

Bridge loan, also known as bridge loan, refers to financial institution A's inability to operate due to temporary lack of funds after receiving the loan project, so it consulted financial institution B and asked it to help distribute funds. After the funds of financial institution A are in place, B quits. For B, this loan is the so-called bridge loan.

In China, policy banks such as CDB/ Export-Import Bank/Agricultural Development Bank play the role of financial institution A, while commercial banks play the role of financial institution B ... bridge loan is an effective tool to directly capitalize purchase opportunities, and bridge loan's greatest advantage is its quick recovery. Bridge loan has a short term, no more than one year, and the interest rate is relatively high, with some mortgages such as real estate or inventory as collateral.

References:

Baidu Encyclopedia-bridge loan