Bridge Financing
Monies required to help the borrower “get from here to there,” where “here” is often “privately held” and “there” is an IPO or similar situation, when money is about to run out, but an infusion is on the horizon.
Larry is the CEO of a software company that is set to raise funds via an IPO in two months. However, he doesn’t have enough money in the bank to pay the associated lawyers’ and bankers’ fees, so he takes out a 60-day loan to pay for those expenses.
Moe gets paid every Friday, but his rent is due this Wednesday, so he asks his landlord for a two-day grace period.
Curly is hungry, but won’t have any money until his Social Security check deposits on Tuesday. He’ll gladly pay you then for a hamburger today.
Larry, Moe, and Curly are all in need of bridge financing.
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Finance: What is a Surety Bond?0 Views
Finance allah shmoop What is a surety bond Think sure
It t like certainty Remember when you were a kid
at summer camp and had to pony up a buck
to prove your heavy roller status at friday night's poker
game And then there was a buddy who promised to
pay more than that if you lost more than your
buck Well surety bonds air kind of like that We
repeat kind of a surety bond is an agreement between
three parties One party guarantees that a second party will
fulfil a promise to the third party For example one
signer might guarantee that a small business will honor a
government contract That is that small business will have to
go borrow a whole bunch of money to go build
a bunch of fence wire stuff for the government that
they would need somewhere in the south And then some
bigger contractor would guarantee that that small business will in
fact perform on the contract If the small business doesn't
perform the contract like as guaranteed building whatever fencing materials
and the government wanted to build will the person who
signed on their behalf would likely have to either pay
up or build the fence themselves The big guy i
either guarantor gives the little guy the principal surety in
delivering the contract to whoever wants it toe happen A
k a The oblige g remember that song about the
government there yet oblige E ope elijah Life goes on
Sorry we're done anyway all the parties involved bond with
certainty the delivery of whatever product or service that surety
bond is standing behind So yeah that's what it is 00:01:36.669 --> [endTime] And don't call us surety
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