You can fuel your business growth with many different funding types, including some you may not realize you already have. Bridge financing, for example, is an often untapped resource for business growth because many owners do not know it can be used in those ways. You can apply for a bridge loan to cover the period between needing to purchase supplies and receiving payment for the final project in more industries than the construction and real estate ones where the term originated.
What Is Bridge Financing
Bridge financing is the money you get to cover the expenses between starting a project and getting paid for it. This type of financing is most often seen in the real estate and construction industries because property loan payments are usually due before renovations or the sale is finalized.
How To Grow With It
You can use bridge financing to fuel business growth by applying for a bridge loan to fund equipment or supplies for a large project instead of saving up for it or waiting until invoices are paid. You can also apply existing bridge funding to growth goals. For instance, if you have a loan to cover mortgage payments while renovating a fix-and-flip property, you can use some of that money to pay for additional equipment or employees to finish current and future projects more quickly and effectively.
How To Apply for It
Most of the time, you can find bridge loans through your bank or a third-party lender. You can even find applications online and be able to upload the necessary documents for a quicker response. Be sure to have a detailed plan for why you need the funding and what you hope to accomplish to increase your chances of getting approval. It is important to remember that you will probably need to start repaying this loan before receiving payment on the project, so the amount is likely tied to your debt-to-income ratio, have higher interest than a traditional loan, or have a balloon payment at the end of the term.
Fueling business growth with a loan to cover the gap between buying supplies for a project and getting paid for it can be an excellent way to meet your company’s growth goals. These bridge loans are usually seen in real estate and construction, but companies in almost every industry can apply for one. Sometimes you can apply for financing online and submit documentation over the internet for faster decisions and application times.