Bridge financing is used to bridge the gap in the borrower’s finances on short-term, while borrowers secure a permanent financial solution. These short-term loans relieve the pressure on the borrower of foreclosing property or losing their business entirely.
This short-term influx of cash allows the borrower to meet real-time obligations such as making payrolls, paying vendors, and paying back other debts. This practice allows many businesses to stay in business while pursuing their long-term financial goals.
So why pick a bridge loan over a traditional bank loan? Here are all the reasons why.
The Quick Approval Process
The process of application, approval, and funding takes significantly less time compared to traditional bank loans or mortgages. This speedy process allows businesses to get the financing it needs to make payroll and purchase assets and inventory.
Bridge loans help businesses buy property to expand their operations or incorporate a new business. This gives a business a competitive advantage over its rivals to close deals faster and expand their business.
Retain Control of Your Business
While waiting on a cash inflow, businesses owners commonly strike a deal with one or more of their equity partners for short-term financing. This causes them to give up a greater stake of the business to the partners as part of the deal. And this might cause them to lose control of their own business.
Bridge loans prevent this with a short-term cash inflow. These are the short-term financing solutions needed to keep your business running smoothly and under your control.
Long Payment Cycles
Cash flow problems are the second biggest reason why startups fail. This means that even a seemingly healthy business may be vulnerable to running out of cash. For example, if you own a plumbing business, that gets paid by the client at the end of the job, that means you will need cash in the meantime to pay employees and buy new equipment. This cash is used to complete the job, take on other projects and clients, and honor other business expenses.
The concept is simple, but that doesn’t mean it’s easy to use its utility without expertise.
If you’re looking to gain access to cash to cover your upfront business expenses, then you could use bridge financing.
Get in touch with Global Capital Partners Fund located in Seattle to apply for their commercial bridge loans. From offering insightful advice on advancing your business forward to how to refinance business, they have the right expertise to help your business.
Learn more about them on their website here.