The uses for bridge funding are growing as the short-term finance grows in popularity to plug a funding gap.
Bridge loans are also a versatile answer for those with a commercial cash flow challenge over the short-term with lenders willing to offer funds for this.
While many people will appreciate that bridging loans have traditionally been used in the house buying process with homebuyers needing to bridge the gap between buying a property and selling their current home which will release the necessary funds.
However, there is also a growing need in the commercial world where a business may suddenly have an unexpected drop in their cash flow. This means the business will be missing funding at what could be a crucial moment.
Short term bridging loans can be flexible
While short term bridging loans can be flexible, they can also be arranged quickly and in many cases within just a few days or, depending on the business and the criteria for borrowing, in just a few weeks. That is still quicker than a traditional bank, for instance.
So it’s important to appreciate that a bridging loan can be used to cover just about any short-term financial need until a long-term financial arrangement is put in place.
Among the potential uses for bridging finance for a business is to buy sales stock for a particular campaign or to refurbish a shop or business premises or even to provide investment for a major project.
Many business people may find the prospect of injecting cash into a project before it begins to generate income as a very attractive proposition.
Use a bridge loan to buy a property at auction
There is also the traditional route for property investors and developers to use a bridge loan to buy a property at auction, for instance, and then to refurbish it before selling it on and receiving the funds to repay the finance.
The loans can be repaid within weeks, months or up to two years depending on the lender’s criteria and while they generally cost more for borrowing than with a traditional lender, they still offer flexibility and can be arranged quickly.
There is no doubt that bridging lenders are helping a growing number of organisations and businesses looking to resolve a funding gap with bridge funding and for more help and advice on this then contact the helpful team at The Bridge Crowd.