A business bridging loan is a type of commercial finance that allows you to access funding over a short period of time. It is often used for:
Working Capital Boost – Some businesses use bridging finance to get a working capital boost, eg. for short-term cashflow issues.
Auction Finance – We’ve worked with clients (often builders and developers) who have bought property at auction where payment is usually needed within 28 days. Our experience helps to make the process between client and lender as smooth as possible. We can even get finance in place before an auction so that you know what funds you will have available if you are successful with your bid.
Tax or VAT bills due – Perhaps you’re waiting on a stage payment from a large contract, however your VAT bill is imminent. Bridging Finance can help to overcome this short cashflow blip and help avoid issues with the taxman.
Waiting on Long-term Funding – You may also seek out a bridging loan for your business when awaiting long-term funding. For example, your existing business or start-up business may be in an equity financing round that is set to close in a few months. You may decide to take out a bridging loan in order to cover costs until the financing is in place.
Business Opportunity – Perhaps a competitor has gone out of business and you’ve got the chance to buy stock at a great price from the Receivers or perhaps a contracted customer base.
Of course, you’ll need to meet the Lender’s criteria and know how you will repay the loan, but we can advise on what Lenders will be looking for and what they will expect from you in return.
This was one of our most interesting funding situations — as we were called by our own bank. One of their clients, Mr S., was being told by the bank that he had to repay the loan that he had with the bank or risk forfeiting the site, complete with a large commercial building, which the loan was secured against.
Mr. S had given permission for our mutual bank to discuss the situation with Prime. After discussion with Mr S. it became clear that his financial situation wasn’t brilliant. We put together a detailed, frank and open proposal to one of our key lenders who agreed to provide the short-term funding that Mr S. needed to satisfy the bank. Another case where thanks to our personal approach, experience and genuine interest in helping the client we were able to help secure a cost-effective solution to his situation.
Prime Business Finance was recommended to Mr O. by the Commercial Manager of one of the High Street banks. Mr O. was building two adjacent properties when it became apparent that further funding was going to be needed for the final phase of the development.
The original mortgage provider wouldn’t accept a necessary 2nd charge on the development which meant that Prime now needed to organise sufficient funding to clear the original mortgage as well as sufficient funding to finish the development.
This was a completely different scenario from that which we were faced with at the start. Thanks to the advanced stage of the development we successfully proposed the changed requirement to a funder and we were able to organise the much higher level of funding that Mr O. now needed.