Utilizing the financing solutions available to you can provide your business with the support you need when you need it most. One of the most versatile solutions in commercial lending is Florida bridge loans, which help to bridge the gap in funding so that you can move on with the finances you need rather than playing a waiting game.
These loans provide flexibility and timely support when you need it most. Read on to learn more about these loans.
What is a Bridge Loan?
A bridge loan really does bridge the gap. This type of loan is a short-term or interim financing solution meant to provide financing quickly rather than waiting for external funding. Most of the time, official bridge loans are used in coordination with SBA loans. In this scenario, the bridge loan covers the SBA portion of financing so that you can get the funds you need and commercial lenders aren’t out those funds during the wait.
When quick access to capital is a must, a bridge loan can help to cover the need on an interim basis. They are generally connected to much larger financial pictures.
How Bridge Loans Work
When you use a bridge loan, the structure is meant to be temporary. That means you get quick financial solutions while you wait for a more detailed solution to come through. In some cases, like with a business startup, it may be interim financing while you work to achieve an initial milestone with your business.
Here is a basic outline of the process:
- You have a pressing financial need, secure a bridge loan, and receive quick capital access.
- The repayment terms are set to be relatively short. Most bridge loans are only for a few months, but they may range up to a few years. This depends on the structure and the need. At the end of the term, the balance is paid in full.
- Bridge loans may have higher interest rates because they are short-term solutions. It is important to be aware of and plan for this.
- Most bridge loans are secured by some form of collateral. In the event of offering the bridge with an SBA loan, it’s just offering interim funding until the SBA funds their portion of the loan.
The Benefits of Bridge Loans
Using Florida bridge loans can provide financial support that is fast and flexible at the same time. These solutions allow you to work with time sensitive needs rather than waiting extended time periods for final approval or funding.
The main benefit is simply the ability to quickly facilitate a transaction when you don’t have much time to act. Investors can make a positive business move and not have to play a waiting game to make it happen. The concept is to manage short-term financial needs with quick and efficient solutions. Get to know the terms, understand how this loan may affect you, and make an informed decision for your Florida business.
