How to overcome funding glitches with a short-term bridging loan


In this article, you will discover how a bridging loan can be a fast and easy way to ‘bridge the gap’ between the purchase of a new home and sale of your current home.

A short-term bridging loan can help you to manage the potentially tricky scenario of purchasing a new home whilst simultaneously trying to sell your current home. If you don’t get the timing just right, you might be faced with the prospect of missing the settlement deadline on your new home, or feeling pressured to sell your current home for a lower-than-expected price due to time sensitivities.


What is a short-term bridging loan?

In simple terms, a short-term bridging loan helps ‘bridge the gap’ between the purchase of your new home and the sale of your current home. The good news is there’s a variety of short-term bridging loan providers in Australia, and you can easily apply for bridging loans online.


How does a short-term bridging loan work?

A bridging loan is a short-term loan that can be taken out on top of your current home loan until the property is sold. Typically, short-term bridging loans are for up to 12 months and range from $25,000 – $500,000, pending on the lender and your personal circumstances. You can apply for bridging loans online from a variety of lenders, with private lenders offering a relatively simple application process, minimal documentation and fast funding (usually within three to five days from application).


When a short-term bridging loan can help

Consider the situation where you find your new home, but have not yet even put your current home on the market. In this common scenario, a short-term bridging loan means you can complete the purchase, and then sell your current home in a more relaxed manner – ensuring you don’t have to settle for a ‘fire sale’ price.


What are the benefits of a short-term bridging loan?

Short-term bridging loans have some key benefits, to include:

  • Being able to purchase a new home when you find it – not after you sell your current place.
  • Avoiding a rushed sale, and potentially a lower sale price, of your current home due to time pressures.
  • Avoiding the rental and storage costs often incurred after the sale of your current home, whilst you find your new property.
  • Removing a lot of stress associated with buying and selling at the same time.

It’s also good to keep in mind that a short-term bridging loan can provide a cashflow injection for personal use when:

  • You want to renovate or prepare your property prior to sale
  • You’d like to complete a small land subdivision or duplex intended for sale
  • You need a deposit for a new property (investment or principal place of residence)
  • You require help with moving, living, legal or medical costs
  • You’re seeking to pay a personal bill or debt that can’t wait until the property is sold
  • You’re downsizing


Key takeaway

A short-term bridging loan is a very fast and easy way to access cash via equity in your home through the sale period. It avoids the pressure of not being able to purchase your dream home when you find it, or conversely a rushed sale of your existing property.



In this article, we’ll look at short-term loans – why you might need one, the benefits of using them, and the different types of short-term lenders in Australia.

Why you might need a short-term loan

You might have heard the saying “asset rich and cash poor” which describes a situation where you have good security, but lack of access to cash. A short-term loan can be a good solution meet temporary challenges and the ups and downs of cash flow in your business or personal life. Short-term business loans usually have a term of two months to 36 months. Common loan sizes are from $25,000 to $500,000.

Why you might consider a short-term personal loan

One of the most common forms of short-term personal loans in Australia is a bridging loan. As the name suggests, a short-term bridging loan essentially ‘bridges the gap’ between the sale of the original home and the purchase of the new house. As such, a bridging loan can be a good alternative when you need to act quickly to secure a new property and the settlement dates for purchasing and selling don’t match, which is often the case.

Less commonly known is that you can use a short-term personal loan to renovate or prepare your property for sale, or even complete a small sub-division. You might also use this kind of loan to pay off personal debts, such as credit cards or a tax bill.

Why you might consider a short-term business loan

Anyone who has run a business understands that a cash flow crunch can occur for any number of reasons, no matter the size of the business. Short-term business finance provides a simple solution and fast injection of funds to alleviate a credit squeeze and let you focus on running your business.

Backed by equity in your property, short-term business finance can be used to:

  • Purchase new stock or equipment
  • Make wage payments or hire new staff
  • Offset slow-paying customers
  • Pay outstanding tax bills
  • Fulfil a new contract
  • Smooth out time lags between invoice payments
  • Start a business
  • Invest in an established business or buy an existing business

You can also use a short-term business loan to take advantage of a new business or investment opportunity that needs immediate action and funding.

Where you can obtain a short-term loan in Australia

The good news is there are many short-term loan providers in Australia, available from a range of lender types. Here’s a snapshot of the main institutions that provide short-term finance:

  • Banks: Traditional lenders are renowned for offering low-interest rates with strict lending criteria. A bank loan typically suits people with high credit scores (i.e. a good credit history based on paying off debt on time, demonstrated savings, not defaulting on a mortgage payment, and so forth). Banks often have lengthy application and approval processes – which is not ideal if you need funds quickly.
  • Private lenders: As the name suggests, a private lender is an independent financier backed by institutions and investors. As such, private lenders tend to be more flexible in their approach and product offering, and are attractive for those with lower credit scores seeking a fast application and approval process. Private lenders usually charge higher interest on loans, which are often deemed as riskier.
  • Non-bank lenders: These are financial institutions that are not banks, credit unions or building societies. Non-bank lenders don’t offer the breadth of products of traditional funding providers, but they are flexible on rates and fees – and therefore often appeal to self-employed borrowers due to less strict lending criteria.
  • Fintechs: A rapidly growing and dynamic sector within the finance industry in Australia, fintechs use technology to keep costs low (passing that onto borrowers in the form of lower interest rates) and algorithms to better judge risks (ensuring fewer defaults and better deals for approved borrowers).

You can apply online for short-term loans from a variety of lenders, with private lenders and fintechs offering a relatively simple application process, minimal documentation and fast funding (within three to five days from application).

Key takeaway

If you are facing a cash flow shortfall in your business or personal life, and you have equity in your property, a short-term loan can be used for up to 36 months for a variety of purposes.


In this article, we’ll look at short-term business loans – what they are, the benefits of using them, and common uses for quick access to funds for up to 12 months.

What is a business loan?
A short-term business loan in Australia is used for business-related purposes, such as investing in equipment, purchasing, improving cash flow, or debt consolidation. Short-term business loans can help smooth out the business’ financial ‘ups and downs’ or help you take advantage of opportunities to grow your business. Short-term small business loans are usually for $25,000 to $500,000, with a term of 3 to 12 months.

Why you might consider a short-term business loan
Short-term business loans can be used for a range of scenarios, including:
• Business expansion: “It costs money to make money” is the old adage and growing a business is no different. Advertising, hiring new staff, expanding or renovating, are common costs associated with a growing business.
• Inventory: Investing in inventory, including expansion and replenishment, can be tremendously beneficial to boost revenue. Though it’s often a double-edged sword as expensive purchases can hurt cash flow, especially when businesses have seasonal demand.
• Cash flow: Small businesses, in particular, have to deal with cash flow fluctuations when inventory is slow to move or customers are slow to pay.
• Equipment: Purchasing new equipment, or repairing/ replacing existing equipment, is often an unexpected (and hefty) expense that is required to keep the business moving.

The advantages of short-term business loans
A short-term business loan has many advantages, including:
• Easy application process: Apply online for short-term business loans in Australia, with a relatively simple application process from a range of private lenders and fintechs.
• Real-time access to funds: Once you meet the lending criteria and the loan is approved, funds can be accessed in as little as a few days.
• Keep control: A short-term business loan ensures you retain full control with no external interference, which is often viewed as preferable to inviting investors into the business.
• Temporary: Once the loan is repaid, your obligation ends. Whereas in the case of equity finance (investors), you have new shareholders for potentially a long time.
• Tax-deductible interest: Payments are more manageable as the cost of funding business growth (loan interest expense) can be deducted from income generated.

Types of business loans
There is a range of short and longer-term loans available to businesses in Australia:
• Term loan: Borrow a single lump sum to be repaid over an agreed period of time, with fixed or variable interest rates.
• Line of credit: Access funding up to a certain amount that can be drawn down as required to help manage cash flow or pay an unexpected expense.
• Business overdraft: Attached to your business bank account, an overdraft allows you to overdraw up to a pre-approved amount.
• Business credit cards: Business credit cards are convenient, though it’s easy to be stung with high-interest rates if the card balance isn’t paid off in full each month.
• Equipment lease: Funds provided and secured against specific business equipment (or vehicles).
• Invoice financing: Invoice financing, also known as invoice discounting or debtor finance, pays the business the majority of the customer’s invoice immediately, transfers the liability of a customer’s invoice to the invoice finance firm, then takes a percentage of payment once the customer pays the invoice.

Key takeaway
If you own property, a short-term business loan is increasingly being considered as a way to obtain funds relatively quickly. You can apply online for a short-term business loan through a variety of lenders in Australia – particularly through private lenders and fintechs. This form of funding can be used for a short period of time (3 to 12 months) for a variety of purposes.