Startups need a continuous flow of budget to stay afloat, particularly during their first few years in business. If you have enough funds to keep your company going, then good. But if you’re like most startups that are often looking for additional funding, you can always consider different financing options available for your bridging loans.
Using Bridging Loans For Your Startup
A bridging loan, or a bridge loan as what others would call it, is a type of loan that allows businesses to access funds quickly when needed. It’s called a bridging loan because it’s commonly availed to ‘bridge the gap’ between businesses and their funding needs.
This type of funding solution has been getting a lot of attention lately because it’s faster to get access to, which is highly favored by startups in need of more budget for short-term expenses. Another advantage of a bridging finance solution is the loan processing that’s typically more convenient than other types of loans available such as secured loans and bank financing.
If your startup is looking for additional funding for an expense needing to be met immediately, here are some uses for bridging loans you might want to take a look at:
1. To Buy A New Property For Commercial Purposes
Bridging loans are often used for buying, renovating, or developing a property for commercial purposes. No matter how minimal or extensive your project may be, it’ll need additional funds, and you can use a bridging loan. This financing solution greatly works for property developers who don’t have enough money to fund their business projects.
What they usually do is apply for a bridging loan to fund the building, renovation, or development of the property. Once the project is done, they can start paying off the loan from the rent they’ll be collecting from their tenants or customers. Sometimes, they also prefer to take out a commercial mortgage in place of the bridge loan so they can pay it up faster.
2. When Relocating Your Business
If you’re planning to relocate your office, a bridging loan could be of help to get you financed. Whether you’re moving from a rented building to one you’ve bought for your business or you want to relocate to a bigger premise, use the loan to get your plan moving. Spend the loan money for professional movers and cleaners so the process can be easier and less cumbersome.
3. To Furnish Or Refurbish Your Office
If you’ve just acquired a new office, you’ll need a budget for furnishing the space to turn it into a conducive and productive work environment. Bridging loans can help you buy new furniture, lighting fixtures, and other essential equipment you need to get the work done.
Likewise, if your office has been looking quite shabby or down at heel due to poor quality furniture, it’s time you consider refurbishing it. Keep in mind that a clean and favorable work environment is needed if you want your organization to stay motivated and productive while doing its job.
4. When Paying A Supplier Or Vendor
At times when you find it a struggle to make ends meet, it can be challenging to keep up with payment deadlines on your suppliers or vendors. It could be that the business hasn’t quite picked up its pace yet or maybe your customers are taking too long to complete their payments. No matter what the reason may be, you can take out a bridging loan to help you pay your bills right away.
Or sometimes, you plan on buying more supplies and you don’t have enough fund for it—then a bridging loan could be of help. You can buy what you need for your startup; and when you start getting money from sale proceeds, you can pay off the loan afterward.
5. To Pay Off Existing Business Debts Or Loans
Almost all businesses have debts and loans they need to pay off. If you think the interest rate is too high and it’s starting to take its toll on your startup, you can choose to pay it off using a bridging loan. That way, you can ease the pressure on your existing debts and at the same time, it’ll be easier to pay if it has less interest compared to the existing loans you have.
If you have more than one debt or loan, what you can do is to consolidate them and pay for them altogether. After that, you’ll only have the bridging loan to worry about. That means less effort and less keeping track of different expenditures on your end. One loan is easier to manage and there’d be a lesser chance of missing a payment.
6. To Expand Your Business
Any startup can have so much potential if and when managed wisely. Sometimes, all it takes is a great leap of faith. If you think your business has what it takes to make it big someday, go ahead and take the risk. You can get a bridging loan to expand your company in any way you think it can. You may invest in new or additional equipment, hire new professionals for different departments, or create new products that’ll make your customers more enticed to the brand.
Expanding your business depends on the timing and on the budget you have as the owner. If you’re ready to move up to the business ladder, you can apply for a bridging loan and use the money to improve any aspect of your brand.
Don’t Let The Gap Stop Your Startup
In conclusion, a bridging loan can be quite useful for startups. You no longer have to worry about where to acquire additional funding especially if you’ve tried several financing options. If you need to buy a new property, relocate your business, pay a supplier, or consolidate all your business debts, consider getting a bridging loan.
Don’t let the gap of financial restraints stop you from turning your startup into a bigger brand and company. Consider the ideas mentioned here as you apply for a bridging loan.