Legal Definitions - swing loan

A swing loan, also known as a bridge loan, is a short-term loan that is used to cover costs until more permanent financing is arranged. It is a type of loan that helps bridge the gap between the purchase of a new property and the sale of an existing property.

For example, if someone wants to buy a new house but has not yet sold their current house, they may take out a swing loan to cover the down payment and closing costs on the new house. Once their current house is sold, they can pay off the swing loan.

Another example is a business that needs to cover expenses while waiting for a large payment from a customer. They may take out a swing loan to cover those expenses until the payment is received.

Overall, swing loans are a temporary solution to help individuals or businesses cover costs until more permanent financing is secured.