Bridge Loans

Bridge loans are designed to bridge the gap between long-term financing and immediate needs. The application and approval process for these loans are generally much faster than traditional loans and can help your business secure new property, acquire new equipment, and bring in new materials for manufacturing while awaiting long-term financing. Financing is usually dependent on the borrowing business’s credit history, so it’s important to have a low debt-to-income ratio and a record of reliable payments. Lending firms can help find a flexible repayment plan with customized terms that meet your business’s unique needs. Because there is more risk involved for lenders, sometimes bridge loans carry a higher interest rate and must be repaid in the short term.

Bridge Loans

When great business opportunities come along, you don’t want to miss out because traditional financing hasn’t come through yet. Bridge loans allow you to move forward when you need to strike on a deal now. Whether that means buying out a competing business, securing a new building for an expansion, or upgrading equipment, a bridge loan gets you what you need now, without a long waiting period. You can also use the loan funds to cover unforeseen circumstances like emergency repairs, gaps in staffing, or losses due to theft. The terms of a bridge loan will require a shorter repayment period of weeks or months and a higher interest rate. It’s important to be sure your long-term solutions are firmly in place.

Bridge Loan text on paper house and Indonesian Rupiah isolated on office desk.

Hard Money Loans

If your business has valuable inventory, equipment, and property, but not a lot of cash on hand, hard money loans can help you turn those assets into accessible funds. Based on the value of your real estate, equipment, or inventory, hard money loans lend you cash in exchange for collateral on those assets. Since this type of loan doesn’t rely on the borrower’s credit rating, it can often be easier to get approval in a short amount of time. Usually, lenders are not under the same underwriting restrictions as banks are, allowing them to evaluate requests on a case-by-case basis. Use hard money loans to cover 50% or more of the value of your existing property.

Equipment Secured

Vehicle fleets, heavy machinery, and high-tech networking equipment eventually need to be replaced due to wear and tear or simply to keep up with new technologies. This can happen quickly, catching your business off guard with a hefty price tag. In this case, the value of your equipment can provide short-term access to cash so you can buy replacements right away, so you don’t have to wait to sell the old equipment first. The equipment becomes the collateral for the loan, so you can secure funding even if your credit is not amazing. These loans often come with a low deposit amount so you can get going right away.

Real Estate Secured

Real estate secured loans are a favorite source of funding for “fix and flip” investors. This allows them to finance the acquisition of new property before that property can be renovated and sold for a higher return. The proposed new property acts as collateral for the loan and reduces the risk for lenders. If your business is looking to expand into a new building, build onto your current property, or take over the property of your competition, a real estate secured loan can help you through that transition. These loans are difficult to get approved, however, if your business is already occupying the property to be purchased.

Inventory Secured

Inventory secured loans are similar to real estate secured loans, except that instead of using real estate property as collateral for the loan, a business’s inventory becomes the collateral. They can be a great alternative financing option to credit cards, as they carry lower interest rates in most circumstances. Inventory secured loans don’t operate based on a business’s credit history, but rather on the value of the inventory. The lender will supply you with a portion of the inventory’s value, usually 50 – 80 percent, which can be paid back when you sell the inventory. This type of secured loan is ideal if your business needs to secure inventory quickly to meet seasonal demand.