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Bridging Loans – Advice
Bridging loans can be an excellent way of living up to their name and bridging a short term gap for companies that need to negotiate some troubled water quickly and effectively.
They provide a fast and flexible solution for a specific need. And in these times of “credit crunch” where cash is very definitely king, a bridging loan can be the difference between business survival and failure.
Bridging loans are usually thought of in property terms – where a commercial property purchase is necessary but where the previous property hasn’t yet been disposed of. Yet they can also be used to bridge a funding gap as a firm awaits the receipt of monies owed - or to assist with a temporary cash flow problem, for example.
But tread carefully here. Bridging loans are usually one of the most expensive forms of finance due to their short term or “emergency” nature in some cases - so they need to be used sparingly and for expedience only.
If a company needs better organised finance for longer periods, there are many options available which will be preferable to a bridging loan. But for a short term fix, a bridging loan can be absolutely invaluable. Always seek expert advice, though. Usually, if there is a “clear exit” for the lender, the credit assessment for bridging finance applications is generally less rigorous than for other forms of finance. They can normally be arranged very quickly - in as little as 24 hours if necessary – with flexible terms from one month upwards.