Bridge Financing

	Definition of 'Bridge Financing' In investment banking terms, it is a method of financing used by companies before their IPO, to obtain necessary cash for the maintenance of operations. Bridge financing is designed to cover expenses associated with the IPO and is typically short-term in nature. Once the IPO is complete, the cash raised from the offering will immediately payoff the loan liability.
	Investopedia explains 'Bridge Financing' These funds are usually supplied by the investment bank underwriting the new issue. As payment, the company acquiring the bridge financing will give a number of shares to the underwriters, at a discount of the issue price that equally offsets the loan. This financing is, in essence, a forwarded payment for the future sales of the new issue.

Related Definitions

Who gets a copy of an IPO's greensheet and why?
5 Tips For Investing In IPOs

Thinking of investing in IPOs? Here are five things to remember before jumping into these murky waters.
The Chinese Wall Protects Against Conflicts Of Interest

After the crash of 1929, this barrier helped define ethical limits, but it did little to prevent fraud.
IPO Basics Tutorial

What's an IPO, and how did everybody get so rich off them during the dotcom boom? We give you the scoop.
The Impact Of Combining The U.S. GAAP And IFRS

The convergence of accounting standards is changing the attitudes of CPAs and CFOs toward harmonization of international accounting.
Analyze Cash Flow The Easy Way

Find out how to analyze the way a company spends its money to determine whether there will be any money left for investors.
Digging Into Book Value

This calculation will serve up your portion of the shareholder pie.
CPA, CFA Or CFP® - Pick Your Abbreviation Carefully

A couple of letters can mean a big difference. Find out which designation you need and how to get it.
Using Enterprise Value To Compare Companies

Learn how enterprise value can help investors compare companies with different capital structures.
Understanding Pro-Forma Earnings

These figures can either shed light on a company's performance or skew it. Find out why.

Why Americans Think Bush Is To Blame For The Economy	The Complete Guide To Calculating Your Net Worth		Top Investment Trends For 2013	5 Viable Career Options In 2013
	How Do Internet Browsers Make Money?	Commodities Of The Future	Trending Stocks And The January Effect