What can businesses do to address cash-flow problems? A short-term business bridge loan may be the answer.
Late payments on invoices, unexpected bills, or projects that need added finance to complete can all create cash-flow problems for businesses. They can make it difficult for companies to pay suppliers, or to take advantage of lucrative opportunities.
Cash-flow difficulties, in worst-case scenario, can sometimes lead to the failure of an otherwise profitable enterprise.
What is a short-term Business Bridge loan?
A short-term business bridge loan is a source of help designed to provide businesses with the temporary financial relief they need.
It is used specifically to bridge a gap between short-term needs and longer-term financing. A short-term business bridge loan can help companies meet their immediate needs, get their finances in order, and lay strong foundations for the future.
They will usually be taken out over a shorter period and may have a higher interest rate than long-term alternatives.
However, because the loan will be repaid sooner, you are likely to pay back less interest overall.
Why might you use a short-term business bridge loan?
A short-term business bridge loan might be the best option for a variety of reasons.
It will often be taken out to cover unexpected expenses like equipment replacement or emergency repairs.
It might be used to finance a seasonal increase in inventory, or to finance a new marketing campaign. A short-term business bridge loan may be the most appropriate way to take advantage of a business opportunity that requires a speedy response like expanding into a new market or moving to new premises.
It is frequently used to cover short-term cash-flow deficits caused by delayed payments from customers or suppliers. It might also bridge the gap between a long-term loan being approved and its disbursement.
Short-term business bridge loans are usually flexible, and give the business owner complete discretion regarding how and when they are spent.
If you’ve exhausted other financing options and your business needs a quick injection of funds, then a short-term business bridge loan might be the answer.
What should you consider before taking out a short-term business bridge loan for your business?
A key thing to consider is what your purpose is in taking out a loan.
You should have a clear plan in mind for any funds that you access to ensure they’re not wasted. If you don’t, then another form of business finance might be more suitable.
In many instances, it will be advisable to seek financial advice prior to entering into any loan agreement. Doing so will help you evaluate your options and make the best decision for your business.
Before taking out a bridging loan you should be sure you understand the repayment terms that you are being offered. A critical aspect of this is the interest you will be charged. It’s important to ensure it is competitive and that you aren’t paying more than is necessary.
The repayment terms of a business bridging loan can vary significantly, so it’s important to understand how the loan will be repaid, including the interest rate, repayment schedule, and any penalties for late or missed payments.
Some business bridging loans may be secured against the assets of the business such as equipment, property or inventory. If that is the case, you need to consider whether you are willing to put these assets at risk.
The costs of bridging loans can differ too, so it’s important to account for any application fees or other miscellaneous expenses.
Before you agree to a bridging loan or any other kind of business finance, you need to be confident that you can afford the repayment terms and understand your exit strategy.
It’s important to be hard-headed, and consider what might happen in a range of scenarios. Being unable to repay any kind of finance can have serious consequences for your business.
How do you get a short-term business bridging loan?
If you’ve decided that applying for a short-term business bridge loan is right for your business, then there are a number of steps you will need to take. These are:
- Determine your needs
Before applying for a loan, it’s important to determine how much money you need, what the loan will be used for, and how you will repay the sum borrowed.
- Research the market
Once you know how much you’d like to borrow and how the money will be used, you can then begin to research the market. There is a range of lenders, many of whom specialise in different types of loans or customers. It’s important to compare rates and terms from multiple lenders, including banks and online lenders. Finding the right one for your needs can be time-consuming, particularly if you don’t have a faultless credit history. For this reason, many business owners will choose to work with a business finance specialist like Business Finance House.
Prepare your documentation
Lenders will usually require a range of documentation to support your application. This might include bank statements, tax returns, and details of any other credit. They will also require personal identification documents.
Submit your application
Now it’s time to complete your application. Increasingly, this will be done online, but some lenders may still require that you submit a hard copy. Make sure you provide the lender with all the information and supporting documentation it requires so that your application isn’t delayed.
Wait for the decision
You will then need to wait for your lender’s decision. This can vary from lender to lender, with some processing applications very quickly. If the lender asks for more information, make sure you submit it quickly so as not to prolong the process.
Review and sign the documents
If your application has been approved, you will receive documentation which you will need to sign and return. Be sure to check the details of the loan are what you expected. Once the signed documents have been received by the lender, the funds will be released. This will usually be via bank transfer.
How Business Finance House can help
If you’re looking for a short-term business bridge loan , then Business Finance House can help.
We understand the market and have a wealth of experience in matching businesses with the appropriate lender. We can take out the guesswork from the process, and increase the chances of your application being accepted.
Contact us today to find out how to get a short term business loan. We can help you quickly access the funds your business needs.
