Commercial Bridge Loans

Written by James Kitchens
Bookmark and Share

One of the main reasons a company or organization will go to a lending institution for a commercial bridge loan is that it has been approved for a loan from a bank, but that loan will not materialize for four months or more. This can cause critical cash flow difficulties. Bridge loans are short term and will be paid back in their entirety as soon as the senior loan closes.

Sometimes though, it will be that a business owner or entrepreneur is faced with an opportunity that will not come again, and which needs immediate financing. Taking out a loan from a bank for such an opportunity is a non-starter simply because bank loans often take months to secure. A bridge loan can nearly always be used and paid back in less than the time it would take to get a more traditional loan.

Meeting Opportunity Head On

A well timed bridge loan can enable a business owner to take advantage of one-off business opportunities or deals that would otherwise be missed out on. Normally commercial bridge loans will be secured with real estate or inventory, or similar equity. It is unusual for bridge loans to be granted to any business that cannot provide solid accounting records and evidence of an overall healthy cash flow situation.

For any business owner, knowing where to go for a bridge loan when one is needed can enable him or her to take advantage of unique opportunities. If you have dealt with a lending institution in the past you'll be in a better position to get a bridge loan from them in the future. This type of financing can make all the difference in today's fast moving business world.

Bookmark and Share