A bridge loan is short-term financing put in place to cover an immediate need pending permanent financing or the receipt of expected funds (asset disposal, capital increase, refinancing). It bridges the gap between two transactions.

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In an acquisition context, it can quickly secure the financing of a purchase before being repaid by long-term senior debt or a bond issue. Its cost is higher and its maturity short (often under 12 months), making it a transitional tool rather than permanent financing.

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Example: a buyer draws a bridge loan of CHF 5.0 million to close the acquisition of a target within a tight deadline, repaid six months later once the structured senior financing is in place.

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At Hectelion, we factor the possible use of a bridge loan into the timetable and financing plan of the acquisitions we structure.