Often referred to as Gap Financing, Bridging Loans and swing loans, a Bridge Loan is a form of short-term financing used until a business or person/persons secures the permanent financing they need.
A Bridge Loan for small businesses is a short-term loan used to provide temporary financing.
A business can use a Bridge Loan to cover short-term business expenses or use it to purchase commercial real estate.
This type of loan is designed to help businesses with their immediate financial needs as they are waiting for other funding sources.
An example, would be when a small business needs to purchase new inventory or equipment yet they have not received payment from their customer.
While they are waiting for payment, a Bridge Loan can provide them with the necessary funds they need to make the purchase thus bridging the gap.
Bridge loans can be an excellent source for covering unexpected costs when a business is waiting on long-term financing.
Bridge Loan terms start at three months and can range up to five years.
There are many different Bridge Financing options.
One which is to be paid when the business goes public, is IPO Bridge Financing that can be arranged for a business going public and covers the cost of an (IPO) Initial Public Offering.
Some Bridge Loans cover financing for real estate properties located in strong markets in need of some or even no repairs.
Real Estate Aset Types That Can Benefit From A bridge Loan:
Office & Retail
- Mixed-Use
- Specialty
- Manufactured Housing
- Industrial/Flex
- Senior Housing
- Self-Storage
- Hospitality
- Funding is usually within one or two weeks depending on the size of the loan and is meant to be repaid with interest within one to three years
Loan amounts can usually be up to five million dollars
- Used for sustaining daily business operations and for a time-sensitive business opportunity.
These loans bridge the gap in cash flow helping with purchasing commercial properties or making other large business purchases.
Some Bridge Loans may be structured to require a mix of upfront and/or an end-term lump sum payment.
Most Bridge Loans are set up for the client to make monthly payments.
Bridge loans will usually involve high-interest rates with some collateral, a business’ inventory or real estate property, equipment or a combination of any of the three to be held as collateral. Bridge Loans are subject to credit underwriting and approval.
With a Bridge Loan the business owner/owners maintain complete control of their business.
Our Private Network of Professional Investors provide small businesses with transparent,simple Bridge Loans, providing access to needed funds fast.
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