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Bridging loans are experiencing a surge in popularity, with the current demand increasing constantly – but why is this? Bridging loans have been a mainstay in the lending industry for a long time, traditionally associated with property. Whilst their use with property still remains popular, with the rise of the modern start-up business, bridging loans are experiencing a new lease of life in both the personal and commercial lending arenas.
Taking commercial use as a starting point, particularly for SMEs, there are a multitude of different reasons why you might take out a bridging loan to help you clear out financial blockers progress further. Here are seven different uses for bridging loans in business.
Relocation, Relocation, Relocation
Thinking of making a business move location-wise? Whether you’re making the crucial first step from rented commercial property to buying a new office, or upscaling to a larger owned premises, a bridging loan can be the financial enabler that allows you to take that next big step to move to a new office for your business.
Expanding Your Business From Within
Maybe you need to invest in more tech, equipment or bring in more staff. You know that this move will increase your revenue and take your business to the next level. However, gradual growth doesn’t fit in with the way your industry is moving, so you need to invest now. With a bridging loan, you can have the financial investment now, which ultimately means the return on investment comes sooner.
Refurbishing The Office
If the office is looking a little shabby around the edges, and staff are unmotivated or safety is a concern, then a bridging loan is a good solution for a refurbishment investment. Whether structural or aesthetic, lenders should take both needs into consideration.
Invest to Ease Cash-Flow
Cash-flow is the age-old key to business. When all the elements align and you’ve got the movement of money down to a tee in business, everything will seem to work smoothly. There’s less stress, worry and everybody gets paid from a full pot. However, cash-flow is tough, especially for start-ups who require a lot of initial investment. A short-term loan can be the fix that eases the pressure when you need it the most.
Clear Out Bills Swiftly With A Bridging Loan
In the same vein of cash-flow, clearing out certain bills short term can be a life-saver when you need to work towards your long term debt management plan.
To Refinance Your Existing Business Debts
Businesses get into debt, it’s a fact of life (or business, by its very nature). What you can do to ease this pressure and help to continue trading is to refinance your debts. By consolidating existing debts into one, you essentially make them easier to manage
To Take A Leap Of Faith
Finally, and to end on a positive, sometimes in business an opportunity arises that you just can’t turn away. Sometimes all the stars are aligned, and all the years of hard work, forecasting and growth planning lead up to a moment in time when you’re able to jump into a new venture within your existing business structure. However, the money isn’t always available, and when compared to the planned return on investment, a short-term bridging loan can be an extremely sensible move to make.
