A business bridge loan is a type of short-term loan. These are commonly used to 'plug the gap' between two long-term financing loans.
This is normally where there's a break between one loan coming to an end, and the next one starting up.
Over 28 million small businesses use such loans. These firms may not have the capital to plug in straight away to a new project, so they need to fund initial costs.
Business bridge financing keeps them above water when the first lender asks for their money back.
Eager to find out more? Here are six key benefits of using this type of loan for your business:
1. Business Bridge Loans Are Fast and Convenient
By their nature, bridging loans must be convenient. They're designed to quickly 'fill in' for long-term loans, so they are often provided almost immediately.
If they hung around too long, there would be little point in this service. Bridging loans are designed to provide working capital in a tight corner.
If you're feeling the squeeze, a bridge loan could be the solution you need.
2. Offers Chances for Early Investment
Don't wait around to start a new project. You could miss potential clients and opportunities.
Perhaps you're waiting for a bank loan to come through, so you can't buy the equipment, software, or tools your staff needs to get started.
Every day you're waiting, you're wasting money. Your employees are frustrated because they can't do their jobs. At the same time, you're covering overheads without being able to make the most of your resources.
Money from a bridge loan can allow you to make the purchase earlier and minimize downtime. It can also be used to pay for equipment repairs to keep your business running smoothly.
3. Your Payroll Stays Up-to-Date
With a working capital loan, you can use the money towards keeping the payroll up-to-date. This is handy if you have large client invoices that aren't being paid on time.
It's employer's worst nightmare. If you can't meet payroll obligations, your staff is inevitably going to start questioning whether it's time to jump ship.
You'll then spend a lot more trying to find replacements. This will only add to the stress of your situation.
Keeping on top of payroll will keep your staff happy and productive. Thus, a bridge loan is a great investment for your business.
Plus, you can use the loan towards the cost of hiring new staff. Expansion is generally needed before any business can take on new work. You don't want employees already worked to capacity to become frustrated when you ask more from them.
Instead, create more bandwidth in your business with a smart bridging loan staffing solution.
4. Advertise Services
For those working in services industries, advertising and marketing will help them deliver returns on the initial outlay.
If you don't have budget left for marketing, a business bridge can plug this gap. This should drive revenue, covering the costs of your marketing campaigns and the working capital loan. And deliver a tidy profit on top.
5. Keeps Your Business Working as It Should
The gap between major capital loans can be lengthier than you might think.
There are forms to be filled in and meetings to attend. The bank's own response time is completely out of your control. You also never know if it'll come back to you at the last minute to ask for more information.
This will push your loan approval back even further.
There are many other steps that could delay you. This can affect customer experience, employee satisfaction, and sales.
A bridging loan keeps things running smoothly while you're sorting out your long-term lending situation. It's simple way to get the job done at the right time.
6. You're Not Borrowing against an Asset
Bridge loans are a type of unsecured loan.
This means that the loan isn't 'attached' to one of your assets, such as equipment or business property. A secured loan is one where an asset is placed into the agreement known as 'collateral'.
With these loans, the lender can try to repossess (take legal ownership) of your collateral if you fail to repay the money.
Because of the unsecured structure of a business bridge loan, you're taking on less risk, and the lender takes on more.
As a result, you're on a more stable footing than with a secured loan. There's nothing up for grabs (besides the money) for the lender to take back.
Secure a Business Loan Today
Is your business looking for a short-term working capital loan? Or a loan to finance (or refinance) its equipment?
Express Capital offers a range of short-term business bridge loans lasting for between 2 weeks and 12 months. We have competitive interest rates and the ability to lend up to $150,000, depending on the purpose and length of the loan.
Our loans are adaptable too. We can help you find a flexible solution to fit your specific financing needs.
Plus, we're a direct lender, not a broker. There's no waiting period while a third-party fiddles with the details.
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