Learn all about Gap Financing. Gap Financing Assistance, definition of Gap Financing, Bridge Loan,Gap Financing Formula everything dealt with. How to bridge that last minute finance requirement for your house or car?. Know it all.Now buying a home or car or to fulfill any financial obligation, avail Gap Financing.

1. Gap Financing: A Quick Fix To Your
Loan Woes

2. What Is Gap Financing?

3. • Gap Financing refers to a form of financial loan that covers a
gap in time, funding, or negotiations.
• It is a short-term loan meant to help people meet an immediate
financial obligation, until they manage to arrange sufficient
funds to finance the longer-term financial need.

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5. Bank representatives are there to assist the customers who are
in dire need of gap financing. These officials guide the
customers and discuss how they can manage to provide
suitable loans.
The basic idea here is that the loan is truly on a short term
basis with the low risk of default.

6. How Does Gap Financing Work?

7. • Gap financing is a short-term loan that is usually payable in a six-month
or a year's period.
• It comes with a a higher interest rate as this arrangement adds to the
lender's risk.
• The customers looking for gap financing are required to put up their
property as collateral.

9. Examples Of Gap Financing

10. Home Loans
• In home loans the gap financing appears between the total
amount of loan and the amount that the bank is willing to pay.
• Here, the borrower can take a specialized to make a down
payment, in addition to the conventional home loan.

11. Property Development
In this case, the gap between the projected sales price and the
development cost, gap financing can help to reach the gap in
order to complete the project.

13. How Is The Funding Gap Calculated?

14. Funding gap can be calculated in three easy steps:
• Divide up assets/liabilities into maturity buckets
• Within each bucket, figure out the value of rate sensitive
assets (RSA) and
• Rate sensitive liabilities (RSL).
Then the funding gap is simply
FGAP = Value of RSA - Value of RSL

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