Business

Benefits Of Bridging Finance For Businesses

Normally, when we talk about bridging finance (or, more commonly, bridging loans), we tend to think of loans that are meant to bridge the gap between the sale of your current home and your purchase of a new one.

However, the term may also apply to corporate transactions such as purchasing a site for business expansion or the refurbishment of an existing structure. If this is the case for you or your business, you can apply for bridging finance here: https://www.bridgingfinanceloans.co.uk/

So how can your business benefit from bridging finance?

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First Of All, What Is A Business Bridging Loan?

In the context of businesses, specifically small and medium-scale enterprises (SMEs), bridging finance refers to an instrument that helps support a business during a financial shift or transition until such time that a more permanent financing option is secured. Once such an option is found, the company needs to repay the loan in full.

In a traditional sense, corporate bridging finance is considered to purchase a new corporate/industrial site, refurbish existing offices or operational premises, site development, or purchase assets at an auction. Today, it can be used for other purposes, provided that a company can give its lender a clear exit plan for repaying the loaned amount.

What Benefits Can Bridging Finance Bring To A Company?

1. You Get Your Money Faster

Bridging loans are among the most accessible forms of finance to arrange. They are also among the quickest to get approved. While instruments like mortgages, development financing, and other business loans take around a month or more to secure, bridging loans are approved and made available to applicants within 24 to 48 hours.

This makes the bridging loan an ideal choice for getting quick cash during an emergency. It can also ensure you have money on hand for urgent purposes or terrific deals you can’t afford to miss.

2. It’s Easier To Get A Bridging Loan

Most lenders demand to know a lot about a borrower before they can facilitate a transaction. This information includes a lot of sensitive data, such as the state of a company’s finances, its lending history, and current credit scores.

However, this is not the case with bridging loans. All you need to do is present an asset of similar value to the amount you intend to borrow to serve as security for your loan.

3. There Are Less Fees To Pay For

A caveat: bridging loans have higher interest rates as you need to pay this back within a shorter period. But it’s considerably more affordable than more conventional loans. Specifically, the interest rate is fixed. Plus, you need not worry about monthly rates or interest costs that go higher over time.

Many lenders who offer bridging finance present their clients with a solid interest structure and options for how and when they want to pay the interest.

4. You Can Use It For Various Purposes

We already mentioned that bridging finance is typically used for buying property, but these loans can also be used for other purposes. Your lender won’t even ask you about them. Instead, all they want to see from you is solid proof that you’ll be able to pay them back along with any collateral you can offer to secure your loan.

If you are interested in even more business-related articles and information from us here at Bit Rebels, then we have a lot to choose from.