Is your company stuck in a difficult cash flow situation? Boost your working capital today with a bridge loan. Learn more about how to effectively use bridge loans to grow your business and improve your financial situation.
Understanding Short-Term Loans
There are many kinds of loans that fall under the category of a bridge loan. This general term doesn’t point to a particular loan type but is more of a loan strategy. Many businesses look to short-term, flexible loans to boost their working capital. A bridge loan may come with higher interest rates than a long-term loan, but you can use your cash freely to invest in growth strategies or cover emergency expenses.
Benefits of Choosing a Bridge Loan
While you’ll need to come up with a short-term solution to repay your bridge loan, you can enjoy almost completely free reign of how you spend your loan. Many bridge loans are cash loans, so you can purchase inventory, invest in new marketing, make a down payment on a property or rehab a recent commercial property purchase.
Once you’ve determined how you could use additional working capital, you’ll simply need to find a way to pay it back. Some loans require repayment in just a few weeks, while others give you a few years to find a funding solution.
Types of Loans
Depending on your type of business and the amount of working capital you need, you can choose from a range of bridge loan options. SBA loans can be used as a bridge loan, as long as you still qualify as a small business.
Another popular option is a commercial real estate loan. Refinance your current commercial mortgage to receive the working capital you need to purchase a new property, renovate your existing one or simply make payroll and other expenses on time.
Finally, a hard money loan is a popular strategy for short-term working capital. Put your equipment, inventory or property up as collateral to receive a short-term cash loan to use however you need it. While you have the added risk of losing your asset, you can typically receive a reasonable amount of funding with little or no restrictions on spending.
Review your local bank or preferred financial institution for additional options for your bridge loans. Choose the best loan option for your specific situation to gain access to fast and flexible working capital to use however your business needs.