You have a business and need a short term and fast loan? If so, you might find that the best option for you is business bridging finance.
Bank Lending
Most people, when thinking about raising capital for a business, would immediately go to their bank for an overdraft or some other loan to be secured on the companies building or other assets.
There are advantages to this course of action, as well as some draw backs. The loan would probably have a relatively cheap interest rate and will be provided by a bank or lending institution you have used or at least heard of before. Loans that have low rates are often the most difficult to obtain, as the price reflects the potential risk, so, to qualify for cheap rates there will be strict criteria. Your business and likely all the directors, will need to have clean credit and have provable income in the form of accounts or at least a reference from an accountant. Loans from high street banks can take 6 weeks or more to put in place, not ideal if you need some cash next week!
Assuming that your business can wait for a couple of months for the money and can meet the application criteria it makes sense to go for the cheaper loan option, obviously the more your business pays for finance the less profit you are going to make.
Fast access to capital
But, what happens if you need to raise money quickly and for a short period of time? You could try business bridging finance. It was often the case that bridging finance was used to do just that, bridging the gap between the purchase and sale of a property and, in many case, it still is.
Bridging is also used as a way of raising capital quickly and with as little fuss as possible. Of course when borrowing significant amounts of money there will always be questions to answer and hoops to jump through, but a bridging loan application is normally less stringent.
The lenders may not be ones you are aware of at the moment but some soon will be. Using bridging finance is becoming more main stream as investors, developers and business owners use it to raise buy or develop property or inject cash to their business.
How fast can you get the finance?
In theory, a bridge can be put in place within a few days from initial enquiry. So you could call us on a Monday morning and have the cash in your account by the end of the working week, sometimes within 48 hours. In practice it generally takes longer than that but 10 – 14 days is very do able.
This is idea for a business that needs to raise cash quickly, say to pay for a large order, but knows that there will be income within a short period of time that will allow for the loan to be paid back. It could also be the case that the business takes out a longer term mortgage or facility with their bank which will have cheaper interest, but they cannot wait for the bank to put it in place.
Using a bridge for development
Bridging can be a flexible and useful tool for all professionals and businesses and that includes those in development. So, if your business is property, bridging can be a fantastic finance resource for you to call on. In the current market there are property bargains to be had and property professionals are looking to take advantage, particularly buying a unit that needs work. Some short term finance lenders will even offer loans to help with the cost of doing the work, allowing even more flexibility.