Bridging loans can be a good short-term option for companies

Thursday, 24 November 2011 05:09

Commercial bridging loans can be useful

Commercial bridging loans can be useful

Whether you own a small business or are in charge of a much larger organisation, bridging loans can be an effective financial resource to call upon. By taking out this kind of credit arrangement, your company can access the short-term cash required to meet a range of goals.

Possibly one of the instances where a commercial bridging loan can be put to greatest effect is with regards to buying property. While they are perhaps more associated with those looking for a helping hand with the purchase of a residential home, bridging finance deals are just as useful for funding the acquisition of commercial developments, whether they are offices, factories or retail outlets.

If you have been looking to purchase a new property for some time and have finally come across one that you like, an unexpected problem – such as the withdrawal of credit from your mortgage provider – can threaten the entire process. However, obtaining a bridging loan can give you the short-term funds you need to allow you to go ahead and purchase the development, while you source alternative finance.

Similarly, a commercial bridging loan could prove a great way to fund buying a property at auction. Such events can present an opportunity for you to get fantastic bargains on a new development; however, as you will only have a few weeks to generate the money needed to complete the purchase, a bridging loan can be a timely way of ensuring you can complete the deal without delay.

Alternatively, you might want to consider the benefits that bridging loans can provide with regards to giving your business a quick injection of capital. Should your company have recently won a major contract or you have a pressing production deadline that needs to be met, it is quite possible that you will need to take on additional workers or need extra staff. In these cases like these, a bridging loan can ensure that you are in a position to obtain the resources you need to meet these pressing commitments.

Commercial bridging loans can be put to almost any purpose, so you are bound to find that they provide a suitable way of raising short-term funds for your company, whatever your circumstances may be.

It is also worth bearing in mind that the process of applying for bridging finance is much speedier than that for taking out a traditional loan.

As these products are designed to provide credit to customers quickly, you'll find that upon submitting your bridging loan application a lender will get back in touch within 24 hours to inform you if it has been approved. Provided that this is the case, the cash could be in your business account just a few days later – so you should be able to quickly put the money to good use.

On top of this, bridging loan providers typically consider all applications – even from those with a poor record of repaying debts. As long as you are not bankrupt and you own the development you wish to borrow against, you ought to find you are in a position to obtain a loan.

With so many benefits to taking out this kind of credit deal, seeking out bridging loan help for your business is something that you may well be inclined to consider.



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Finance articles

  • Is a bridging loan right for budding entrepreneurs?

    Raising the money you need to start a business can be hard, however, there are alternatives to bank loans. Among them are bridging loans, peer-to-peer lending and borrowing money from friends and family, meaning you need to do plenty of research.

  • Important questions to ask bridging loan companies

    Before taking out a bridging loan, you must understand a number of key points. These include the rate of interest you will be charged, the length of time you have to repay the loan and whether there are any arrangement fees that apply.

  • Why bridging loans are only suitable for short-term funding

    You should only consider bridging finance if your funding needs are temporary. This is because the high rates of interest make bridging finance unsuitable as a long-term solution, so if you have long-term needs, you should look at other options.

  • Banks vs. specialist lenders – which bridging loans are best?

    Both banks and specialist bridging loan companies can provide the bridging finance you need, meaning you need to compare products from a range of providers. You need to look at factors such as interest rates and arrangement fees.

  • Can bridging loans work for those who only need small amounts?

    Some bridging loan companies will lend up to £5 million if you have sufficient equity in your home, however, what if your borrowing needs are more modest? If you need a sum of £10,000, bridging loans can still be an option.

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