Gap financing is generally a term used for short term or interim loan needed to run business operations or fill the gap between minimum capital required for a business and availability of it.
When starting a business capital is required to run it. The lending institutions or banks always has a minimum percentage for lending because of the low security provided by the borrower or not having enough down payment this finance gap which is required to run a business
This gap can be filled by capital is injection in the form of equity which means lending money from shareholders or investors or by reducing the size of operations or productions.