Can be referred to as bridge or interim financing, gap financing refers to a short-term loan for the purpose of meeting an immediate financial obligation or asset requirement until sufficient funds to finance the longer-term financial need can be secured.
Real Estate example is when a landlord or investor needs to put down a deposit on a big investment immediately while waiting for long-term financing to become secured. Similarly, gap funding can be great for investors who want to make a serious, fully backed bid on a property at auction by showing available funds prior to sale.
