Business Bridging Loans Grow in Popularity as business owners decide that need finds fast and they can’t wait weeks or months for bank.
In the world of financing, particularly in the various loans, mortgages, and other financing options available, business bridging loans have suddenly become popular, slowly becoming a better and more favourable option for businesses. Why is business bridging loans suddenly in the spotlight and how does it differ from other loan or mortgage plans?
A bridging loan is a short-term loan and is often arranged in one-year payment plans to pay it off and has usually very high interest rates. The term bridging loan stems from the very thought of the loan itself: allowing those who apply to be able to meet current expenses and obligations, figuratively, becoming a bridge from getting to their current and present financial status to a better financial status. A bridging loan is most often secured with collateral, usually a commercial or real property, or similar high asset properties. They are sometimes referred to as short term business Caveat Loans.
Who would require a Business Bridging Loan?
Bridging loans used to be dominated by the real estate sector, but business owners already saw the potential and the advantages of applying for a bridging loan. For the realty sector, this applies when a buyer of real estate currently lacks the funds in purchasing new property when an initial property that they have has not been sold or has no prior selling yet.
A business bridging loan on the other hand can be used as contingent funds to be used for when there is an in-between with an existing and currently ongoing project with a client/customer and a new starting client/ customer. It can also be used for times when there are low-income-generating sales/projects while waiting for a time or a season to be able to generate a lot of sales. But usually, business bridging loans are used as purchase money of either stock or property or for the running costs of the business. Sometimes businesses also turn to business bridging loans when they are waiting for a long-term, low-interest, but longer to process loans to cover the expenses that they will encounter during the wait.
Why a Business Bridging Loan over a Bank Loan?
Between a traditional loan and a business bridging loan, why is it that businesses still prefer the latter? For one, loans like bridging loans have a faster application process, fast approvals, and fast funding process than traditional loans. Although the interest rate is higher than traditional loans, business owners tend to still choose business bridging loans with the intent to pay it off quickly, or even using low-interest, long-term financing loans to pay them off. What is important here is that they receive the business bridging loan as swiftly as possible.
Applying for a business bridging loan is easy. Simply CLICK HERE and you could be funded in just 1 business day.