Finding The Right Bridge Loan To Resolve Your Financial Problems
When faced with the challenge of financing the purchase of an asset or continuing operations, many business owners reach out to their lenders for financing. These loan requests are often rejected because they don’t meet the bank’s lending standards and requirements. In these instances, a bridge loan can help get you over this financial hiccup until you find the right lender and terms that suit your needs.
A bridge loan from Joseph Stone Capital is a short-term loan with fast approval and quick disbursement that enables businesses to avoid shutting down or selling an asset at a loss during the transition from one financial situation to another. With so many lenders out there, it can be difficult for business owners to know which ones to approach for financing.
What is the Function of a Bridge Loan?
A bridge loan is used as a quick and short-term solution to get your business through a financial hiccup in a transitionary period. This loan is used as a supplement to your existing financing — not as a replacement — to get you over that financial bump until you can find the right lender and terms that suit your needs. It enables businesses to avoid shutting down or selling an asset at a loss during the transition from one financial situation to another. A bridge loan is usually offered in the following situations:
- When a business owner is applying for a loan but the loan process takes a long time.
- When a business experiences cash flow shortages that need to be bridged until the next expected revenue is generated
- When a business needs to replace short-term financing with a more suitable financing
- When a business needs an interim financing option while waiting for the completion of a major project
- When a business has a project financing but needs to bridge the gap until the project is completed and the final payment is received
- When a business needs funding to acquire an asset that is expected to generate future revenue.
How to Find the Right Bridge Loan?
To find the right bridge loan, you first need to determine your borrowing needs. You also need to know what your options are, including the type of bridge loan that best meets your needs. Among the different types of bridge loans, asset-based loans and factoring loans are the two most popular ones. While the former is suitable for those who are looking to secure long-term financing, the latter is best for those who are looking for a short-term solution. Another factor to consider is the lender’s approach toward your business. Make sure you find a lender that is familiar with your industry, has the sound experience and has a good track record of helping businesses in your industry succeed. In this type of situation, Joseph Stone Capital can help you.
A bridge loan is a quick and short-term solution to get your business through a financial hiccup in a transitionary period. It is usually offered in situations when a business is applying for a loan but the loan process takes a long time; when a business experiences cash flow shortages; when a business needs to replace short-term financing; when a project needs an interim financing option; or when a business needs funding to acquire an asset that is expected to generate future revenue.