What are Bridge Loans?
They are a short-term lending agreement that bridges the gap until the borrower obtains longer-term financing. When a borrower takes out the loan, they are usually expecting a payout from a future sale. The loan gives them the cash they need until this sale happens, then they use that money to pay off the loan. Bridge loans are short-term loans, so common terms (depending on your lender) usually start at six months and range anywhere up to a few years.
- Quick turnaround
- Less stringent underwriting guidelines
- Allows your business to grow and thrive without cash flow restrictions
When to Get a Bridge Loan
Rapid growth is just one reason to get a bridge loan. Let’s say your company’s marketing campaign goes viral and retailers are coming to you from left and right wanting shipments of your products for their stores. If you’re not equipt to fill all of these orders, a bridge loan would be a perfect solution. It would allow you to manufacture enough product to fill these orders, and then when the clients pay you, you would then use that money to pay off the loan.
Solution to Property Matters
These loans are also a great option for individuals or investors looking to purchase new properties. If you’re wanting to purchase a new home before your current one sells, doing a major remodel and have solid equity in your home, or are an investor looking to add a potential rental to your portfolio, bridge loans allow you the cash you need in order to close a deal.
A Smart Tool for Company Growth
Bridge loans are becoming a very popular option for many different people and businesses in a variety of positions of advancement and growth. Whether you want to expand your business or buy a new property, bridge loans are a great financing tool for individuals and businesses alike that want to meet their personal or business goals.