Bridge financing is a short-term funding arrangement used by companies, real estate developers, or individuals to 'bridge' a gap between an immediate capital need and a longer-term financing solution that is pending or anticipated. Typically structured as short-term loans, bridge loans, or convertible notes, bridge financing carries higher interest rates than conventional debt due to its short duration and higher risk. In the Indian context, bridge financing is commonly used by real estate developers between project phases, by startups between funding rounds, and by companies ahead of an IPO or rights issue. For investors and analysts on Ventura Securities, understanding bridge financing is important for assessing a company's near-term liquidity position, debt structure, and the dilutive or refinancing risks it may carry.
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