4 Reasons Why You Should Apply for a Bridge Loan

Are you looking for a quick access to capital? You might want to check out bridge loans. As the name suggests, bridge loans intend to “bridge the gap” until your business is able to qualify for a permanent, long-term financing solution. Homeowners, property developers, and businesses such as restaurants, retail shops, and hotels use bridge loans.

Bridge loans commonly have a lifespan of 36 months and they charge higher interest rates compared to other long-term loans. Despite the odds, many businesses still apply for a bridge loan, and here are four reasons why you should apply for one as well.

1.    Bridge loans offer speedy financing.

Since a bridge loan is a short-term loan, it’s faster to get approval than other forms of financing. This makes it easier for businesses to take advantage of discounted investment opportunities that may arise. Bridge loans help businesses seal negotiations so they don’t miss any business opportunities.

It’s important to choose experienced specialty lenders that are able to meet your financing and timing objectives. In fact, bridge loans can be funded in as little as 14 days! This type of short-term loan enables businesses to acquire, stabilize, and renovate commercial spaces before securing a permanent, financing source.

2.    No Prepayment Penalty

Another benefit of bridge loans is the lack of a prepayment penalty. This means that businesses are able to pay off the bridge loan at any time. In mortgage loans, borrowers typically pay a penalty fee if they pay for the loan early. Without a prepayment penalty, bridge loans are a flexible option for businesses looking to secure a long-term loan.

3.    When unexpected tax bills arise.

There are times when businesses receive unexpected tax bills, and sometimes, businesses aren’t able to pay the bill within the tax deadline. To avoid paying for penalty fees, a bridging loan is one of the most viable options to ensure the tax bill is paid within its deadline.

4.    If you need short-term working capital.

In business, there are good days and there are not-so-good days. There can be a decrease in cash flow because of seasonal business fluctuations. Sometimes, businesses need short-term capital to run day-to-day operations. You can use bridging loans to buy stock, equipment, or other purchases your business may need.

A bridge loan is a valuable tool for small business owners looking to seal the deal on unexpected business opportunities. When applying for a bridge loan, look for a finance company that is familiar with this type of loan. They can advise you on what to do and help expedite the process so you’re able to receive your loan in no time.

If you need more information about hotel bridge loans, SMB Compass will gladly help you with this matter. Our team of professionals is equipped to assist you in choosing the best loan for your business. Feel free to give us a call at (646) 569-9496 or email us at [email protected].