What does popular science | mean by "crossing the bridge" financially?

In the financial world, many people have heard the term "bridge loan". But in fact, the bridge itself is a short-term capital financing, the term varies from a few days to several months, up to half a year, is a means of docking short-term funds and long-term funds, similar to the mismatch of funds of financial institutions (short-term funds invest in long-term projects).

For example, Xiaobai Loan opened a small shop, but this year the business is still good, and new big orders are constantly flowing. So Xiao Bai wanted to expand his business and purchased production equipment with the remaining funds of his own. However, the original bank's 1 million loan could not be repaid. If you wait until after the New Year, the receivables can be recovered, what about these months? So Hu Xiaobai found The Little Black Company, hoping to let The Little Black first help to repay the bank loan and spend these months, while agreeing that Xiao Bai would pay Xiao Black more interest and some handling fees for this money than the bank loan.

After Xiao Hei completed the investigation of Xiao Bai's shop, he felt that the business situation was good, so he called 1 million yuan to Xiao Bai, and Xiao Bai took the money to return to the bank on time and paid interest, and then he could continue to take out a normal loan. This is the bridge loan.

But in fact, in economic activities, in addition to the above-mentioned situations, there are many situations where bridge funds are used:

1. The owner uses the money urgently and uses the real estate mortgage to borrow 1 million yuan from the bank. When the principal is due, the principal has not been recovered, so the loan company bridged the loan of 1 million yuan to advance the bank's maturity loan. Wait until the bank has completed the loan collection, and then repay the loan company with a loan of 1 million yuan from the bank.

2. Financial institution A (usually a policy bank in China, the amount of loan projects is often very large) After getting the loan project, there is no money to lend for the time being. So to other financial institutionS B (usually commercial banks) to help you issue funds for yourself, and when your own funds are in place, you will withdraw and give you the corresponding interest or handling fees as compensation. And this kind of words is more like a loan, but the essence is still bridge funds.

Of course, there are many situations derived from the bridge loan, such as your house is worth 1 million yuan, and you have borrowed 700,000 yuan in Bank A, but now the house price has risen, rising to 1.5 million, while Bank B can borrow 80%, that is, 1.2 million (1.5 million * 80%). At this time, you need to pay off 700,000 yuan of Bank A in advance before you can release the mortgage and lend 1.2 million to Bank B. Many people often can't come up with 700,000 yuan at a time for a while, so they will complete this series of operations through bridge loans.

As the saying goes, if you borrow and repay, it is not difficult to borrow again. Banks stipulate that they must repay the loan once a year in order to lend new money, so many people will not hesitate to pay high bridge fees to take more bank loans.

Of course, the bank is not a fool, the bank sees that you have difficulties in operation, it will immediately collect and repay the loan, he will not care about you so much, are "sunny days to send umbrellas, rainy days to collect umbrellas" kind. However, if the bank forcibly "collects the umbrella", then the enterprise can only go bankrupt, the bank increases the bad debts, and it is also the owner who suffers the loss. Therefore, many times after the enterprise pays off the loan through the bridge funds, the bank will not lend to you, the reason is: afraid! I repented and did not renew the loan. In this way, banks transfer the risk of bad debts to companies and lending companies.

Now many local governments have also begun to pay attention to this aspect, and some will set up similar emergency working capital funds. When a business in the jurisdiction has financial difficulties, it can apply for a loan that is much lower than the market interest rate. In this way, it can also reduce bad debts of banks, help enterprises turn around, and maintain local financial stability.

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