Are you in need of short-term cash to maintain your business accounts? If you don't have the money you need to pay for your cash flow and other needs, bridge financing can help as it allows you to maintain your cash flow and financial stability while you are working with lenders to acquire a long-term loan.
It is common for people to seek bridge financing when they are trying to close real estate deals. Businesses often turn to bridge financing when they need the money to pay for cash flow and other needs to keep the business running.
Bridge financing is attractive to lenders because it offers them a chance to acquire a generous interest rate on the loan. Borrowers like it because its one of the only solutions out there if you are in need of money now while you are waiting for other lenders to review your business credit and application to determine if you are worthy of a long-term business loan.
The lender will take a look at your business finances in order to determine if you can reasonably repay the loan. What are your cash flow projections for the lender to view and see if you are able to repay the loan? Base your projections on previous cash flow projections in order to show them a strong financial background and a stronger financial future.
If you are using bridge financing for real estate, you are usually dealing with a new piece of property. As you are waiting on a lender to approve your loan there may be a time when there is a lag or gap in between the loan being approved and the acquisition of the new property. Bridge financing provides you with a chance to "fill the gap". They will offer you the money to pay for the new home while you are waiting for your other loan to close so you can acquire the equity from your previous home. This way you can still take possession of your new home even if you haven't sold your other property. After you acquire the money, use it to pay off your bridge loan so you don't need to pay the high interest rates on the loan. Bridge financing is a great option as it allows you to get into a new piece of property or it can help your business to grow and expand.
The application and approval process for bridge financing is similar to that of any other loan. You will need to provide the lender with strong financial records of the business so they can verify that you have been able to sustain your existing loan payments. They will then need to see that you can legitimately take on more debt and pay it off in a timely manner. Your business plan must be free of errors. If there is one simple error, the lender will see this as an oversight on your part and discredit you for being an organized company. Make sure you do some market research and include it in your business plan to show the lenders that you know how to reach out to your target market and that they can sustain your business to help you repay your loans in a timely manner.
The application process will ask for information about how much money you need and where the funds will go. The lender needs to see exactly how you are using their money and if you can afford to repay it in a timely manner. Include a list of each company you plan to pay for things like your bills or for necessary things like your equipment and supplies. Then you can present it to the lender and they will review the information and make the decision as to whether or not you are worthy of a loan.
Corporate Credit Concepts specializes in bridge financing. For more information about bridge financing and how it might benefit your business, please CLICK HERE for a free phone consultation.