With the rise of many businesses from small scale to medium enterprise to humongous conglomerates, the need for better financing has also taken a hike. One of the few most popular and effective options that came out was that of bridging loans. Unfortunately for many, the sound of them is still a little new if not totally alien so today we’ll talk about them and the benefits they bring.
Bridging loans by definition is an interim financing arrangement that provides a short term loan. It is designed to provide for temporary or short term funds until a permanent source or form can be obtained or made available. They are popularly used whenever sources such as bank loans, mortgages, sale proceeds or income do not arrive on time but a need has to be fulfilled. Upon the arrival of one’s permanent funding, the bridge shall then be closed with it.
The use of such mode of finance comes with a number of benefits to boot such as but is not limited to the following.
1. It is strictly short term. – We all know that the longer the loan is the more chances for borrowers to be burdened by it. Its short term nature allows for lesser fees to worry about and lesser months to pay off.
2. It is easy to acquire. – What makes it a great form of interim finance is the fact that they are easier and faster to process than others of its kind as well as the more traditional forms of credit. The funds can be made available in mere days or weeks even for some providers.
3. It saves you a lot of time. – You no longer need to wait for your loan’s approval and release before you get to acquire that new office building. You can use the bridge to pay up the upfront costs such as the down payment, move in and go on with operations. In business, we all know that time is of the essence so the faster things are done then the better.
4. It cuts risks as well. – Companies no longer have to worry about failing to come up with funds to seal the deal on a prime asset. It need not anymore suffer from opportunity losses.
5. It allows for liberty of payment. – Bridging loans allow borrowers to choose when to pay and close it. You can do it before maturity and as early as you are capable of or at maturity date, upon availability of your permanent financing means. Learn more about here www.alternativebridging.co.uk.