Maximizing Funding for Small Businesses

smallbusinessFor most small and newly established businesses, the finances are one of the most challenging tasks if not the victor of them all. It’s really hard work, persistence and the use of the right devices to make it work. At best, business owners need to learn how to maximize funding for small businesses regardless of how huge or minute the numbers may be.

It’s not impossible albeit it is a very challenging one. However, the task is a necessity and one that brings about positive outcome. After all, who would not want to maximize whatever amount of capital they have? On that note, we’ve come up with the following tips gathered from experts and finance professionals to help us achieve this feat.

  • Understand how your business works. Each and every company is unique, No two are completely the same. This makes it a must for you to fully get to know and understand your full line of operations, front end, middle and back office. By doing so, you get a better grasp of its needs.
  • Use the right financing streams. There are many ways on which to finance a company. In fact, most entities make use of a combination of methods. Before picking which ones to use, be sure to fully understand how they work alongside their sets of benefits and disadvantages. You cannot maximize what you have if you do not understand how to use them properly.
  • Be aware of how your disbursements flow. Expenses are also unique for every entity. Likewise, you must have a firm grasp about them. Know when they are obtained, how often, for how much, what for and all that.
  • Allocate accordingly. The best way to maximize your finances would be to allocate them across your needs while keeping tune of priority. You cannot possible spend for everything all at once so it would be wise for you to chop them up into smaller amounts and match your funding with your needs. In short, make a budget.
  • Make your plan known to all involved. Owners must keep in mind that no plan or set of procedures regardless of how effective will work if its users are not aware of them. Everyone must understand and be in tune of the entity’s means of using their finances. This is also the reason why meetings among supervisory posts and the creation of standard operating procedures are to be established.

See? Maximizing your funding for small businesses isn’t rocket-science tricky.

3 Entrepreneurs on How Commercial Bridging Loans Made a Difference

Commercial-briding-LoanTo make a difference means to spark significant change and such has been the case thanks to commercial bridging loans. This interim financing method has allowed opportunities to be grabbed, emergencies to be solved and needs to be provided for. It’s one of those financing methods that we’re glad came into existence.

But what really makes bridging loans quite a monumental and groundbreaking innovation? We asked five entrepreneurs on how it made a difference for them and here’s what they had to say.

  • “The factory was busy trying to reach the day’s quota to meet production needs when one of the machines broke down. We had to either purchase a number of parts to fix it or buy a new one. The company has been retaining part of our earnings for new equipment but it’s not yet enough, at least not until we finish this order. The equipments at the factory are worn out and have exceeded their useful lives and if we were to be practical, it would make more sense to get new and better ones. Getting a bridge loan saved us that week. It provided us enough cash to complete the down payment for the new machines and we were back on track.”Ben, Leather Goods Manufacturer
  • “We were waiting for our mortgage when another buyer came to look at the commercial space we wanted to purchase. Since we didn’t have the cash to make a down payment yet or even a security deposit, we were on edge that someone would get to buy our dream location. After all, we can’t blame them since it was a great deal and location was spot on. Through a bridge, we managed to get enough funding for a security deposit which bought us enough time until our mortgage arrived. ” — Toni, Restaurant Owner
  • “Bridging loans helped us a good lot. Since most financing options are out of our reach during the initial stages of business, we couldn’t get our hands on any funds to help us purchase necessary assets. When we finally did, so much time has passed and we were losing opportunities. That and we still had to wait further for the scheduled cash release. Luckily, a friend advised us about bridging loans and how it can help us fund for short-term liquidity needs and it did.” — Troy, Startup Founder

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What the Commercial Bridging Finance Industry is About and Why You Should Care

UKWith so much information being bombarded to us, it’s a blessing that our brains are equipped with a means to automatically and subconsciously filter what we receive and more importantly what we retain. But if there’s something that an entrepreneur and investor needs to consciously seek information about these days, it would be the commercial bridging finance industry. But why should we care?

Commercial bridging finance is a service, that as its name suggests, provides funds for commercial purposes. What sets it apart is its short term and interim nature which makes it very effective for immediate short term liquidity needs. What does this mean? A bridging loan is a funding option taken pending the arrangement of a bigger and permanent financing. We know how long it often takes to arrange cash and this pertains to both income and credit sources. This can spell trouble because many needs can be immediate with others even unforeseen, for instance emergency disbursements.

What commercial bridging finance does is bridge the gap created by the timing constraint so a transaction or need becomes viable as need be. Still confused? Allow us to apply it to a real-life setting in two ways as follows.

Case No. 1 – A shoe company received a massive order from a new client which would require it to acquire additional raw materials, labor and equipment on top of its usual production needs. The business then goes off to pool resources from its sales and retained earnings fund. Since these are big ticket and/or bulk purchases, they would often constitute a down payment. As production needs to start early for it to stay on schedule, the business may use a bridge loan to finance the down payment while it arranges for adequate resourcing.

Case No. 2 – A real estate investor wants to acquire a series of commercial assets to add to their investment portfolio. But this, as we all know, is both a complex and costly venture as pre-acquisition costs are very real. To avoid losing the opportunity to other interested buyers, the investor makes use of commercial bridging finance to provide for the initial costs of the purchase (e. g. security deposit, down payment, research costs, and professional fees).

In essence what the commercial bridging finance industry does is provide opportunities to people and organizations when they are in the midst of a time constraint between needs and funding.

Facts You Need to Know About Bridging Loans

loanWhen it comes to choosing a type of financing, one has to carefully screen and scrutinize each option to determine which one best complements one’s needs and which is a better fit for a certain scenario. We can’t just pick in random or else we’d be in trouble for sure. That said we’re here to help you understand said options better starting off with bridging loans.

Now to most people, the term bridging loans may sound a little foreign or new. They’ve been around for a while now but not many are aware of the possibilities and opportunities they bring. To begin with, they are a type of interim financing that provides for a temporary borrowing to fulfill short term liquidity needs. In other words, bridging loans are taken out pending the arrangement of a long term and often bigger fun line such as but are not limited to bank loans, mortgages, proceeds from sale and salary to name a few.

They are taken out in order to provide for pre-purchase costs or requirements that are necessary for the fulfillment of a particular transaction, for instance the acquisition of equipment or real estate. The most common examples would be down payment, security deposit, research costs and professional fees. Sometimes a bridge may also be utilized to pay for the first few initial installments of a purchase.

What’s great about this interim financing option is that it is not only faster to process but it is also nonrestrictive in nature. This means that providers, at least a good majority of them, allow users or borrowers to utilize and allocate the funds from the bridging loan in whichever way they deem fit. Users get the liberty when it comes to the budget and the use of such resources.

Moreover, its short term nature allows for its effectivity because the period, often between two weeks to three years at most, allows leaser risks and strain when we talk about the burden of payment. Most providers and forms of bridging loans also allow users to choose between two payment options. The first is where borrowers get to pay off the bridge prior to its maturity thus saving up on interest costs while the second allows payment at maturity date which is likewise the time by which one’s long term financing or source of funds has come through and shall therefore be used in part to close the interim loan.
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How is Property Bridging Finance Used?

If you think raising funds is a challenge, choosing a type of finance is equally as tricky. Apart from there being tons of options in the market, identifying which one would best suit your need takes a lot of research and caution. If you’re looking at property bridging finance then you’re in luck. Today, we give you a glimpse as to how it works, what it’s used for and what its perks are.

What is it?

By definition, property bridging finance is a type of interim financing that provides for bridge loans. These are temporary borrowings taken out pending the availability of a permanent and often bigger financing such as a mortgage, a bank loan or proceeds from a sale.

How is it used?

As its name suggests, property bridging finance is used on the interim. It seeks to provide for immediate short term liquidity needs and in the case of real estate acquisitions, these are those pre-purchase expenses that are vital to the transaction and without which would not make it possible. To site some examples, it is often used to fund for the research costs, the professional fees paid to agents, brokers, lawyers or solicitors, the security deposit and the down payment.

A bridge lasts for only a short amount of time unlike its permanent counterparts. It spans from a few weeks to three years at most. As for the repayment procedures, borrowers have two options of doing so. They can close it prior to maturity thereby reducing interest expenses and they can also do so at maturity which is often the date by which permanent financing becomes available.

What benefits does it bring?

When we speak benefits or perks, property bridging finance has got a lot to boast. First of all, it’s faster and easier to process. Since it was designed to work on the interim, providers make sure that cash release only takes days to a few weeks. Plus, there aren’t as many documentary requirements to provide.

Moreover, property bridging finance allows investors and buyers to acquire the assets they’ve been eyeing on immediately. This cuts off the waiting time which only heightens the risks of losing the opportunity. As we all know, prime assets do not stay in the market for long as people will want to snatch a great deal the moment the spot one. So in essence, it is a tool that helps reduce if not eliminates opportunity costs.

Never Do This With Your Property Bridging Loans

bridging loanProperty bridging loans is one of the forerunners when it comes to providing immediate short term liquidity funds. They’re popular not only to organizations and business entities but also to individuals who wish to acquire real estate assets of any kind.

Designed to supply for short term liquidity needs, property bridging finance provides what we call a bridge loan, a temporary borrowing taken pending the application/and or availability of a permanent and often bigger financing (e.g. mortgage, bank loan, proceeds from sale and income). Its most popular application goes to the initial or pre-acquisition expenses such as research costs, professional fees, security deposit and down payment among others.

Property bridging finance’s most celebrated benefit has to be its ability to reduce if not eliminate opportunity losses. Because it provides for the initial costs aka the fees that ultimately get the ball rolling, it helps buyers acquire the asset before anyone else does. We know how competitive things can be in the real estate market. Plus, properties tend to increase in price and value over time.

But like anything else, property bridging finance has to be used properly and accurately in order for it to be utilized to its full potential. It won’t be beneficial if it’s not used in the way it was supposed to be. Take the following for instance.

  • Use it as a permanent financing. – If you read the definition again, the method is a temporary loan that provides for short term liquidity needs. It should in no way be utilized to replace one’s permanent financing. It only covers a few weeks to three years at most. Using it for more than that wouldn’t be wise at all.
  • Overlook the exit route. – At the end of the day, property bridging finance is still a borrowing so it should still be repaid. Before taking one, you should already have a plan as to how to close it and where to source the cash from. Luckily providers allow users to choose between closing the bridge before maturity or at maturity (the date permanent financing becomes available).
  • Forget to budget the cash. – Property bridging loans constitutes cash and we all know that resources have to be utilized wisely regardless of size and source. If you want to make it a worthwhile borrowing, see to it that you budget the funds wisely and allocate them accordingly.


Facts You Need to Know About Bridging Finance

Fact-stampWhat first comes to mind when we speak of “bridging finance”? Most people would immediately think of the literal structure that we see on our usual trips around town. Funny? Not really because it’s not a far cry.

Bridging finance was named after the said adjoining structure. In the finance world, it serves a similar purpose. It connects two planes, two points, two transactions. For people who are new to the said service, this article is for you as we’re laying down the facts about thus funding method.

Technically, a bridge loan falls under the category of interim financing. This means that it is one taken out pending the application and/or availability of a bigger and permanent financing. In other words, it is a temporary loan. It serves to fulfill immediate and short term liquidity needs which without completion will render an entire transaction invalid and impossible. Too structured? Let’s simplify things down and use an example.

Let’s assume that a shoe manufacturing company is expanding its operations. It has been scouting for new locations where it shall set up shop branches. However, a huge chunk of its liquid assets are retained for other purposes so it applies for a bank loan to fund for the acquisition. We all know this type of credit, much like its siblings, are meticulous and take so much time to process. Is that an issue? It can be.

After much research, the company finds the perfect properties. The only catch is that they are perfectly situated that so many other buyers want to snatch it up. The seller can only offer it to whoever is able to provide for the requirements first and best. To solve the dilemma, the shoe manufacturer takes out a bridging finance and uses the fund to pay for the security deposit and eventually the down payment. These should be enough until the bank releases the cash which eventually pays off for the remaining balance and the bridge.

Because of their short term nature, bridging finance is faster to process. They are smaller in amount too. The same holds true for its time period which can be anywhere from a few weeks to at most of three years. In the example above, it provides for short term liquidity needs in an asset acquisition which pertain to pre-purchase expenses such as but are not limited to research costs, professional fees, survey expenses, security deposits and down payments.

Breaking Commercial Bridging Finance Myths

Acommercial loanWhen it comes to raising funds by virtue of credit, people have two main options and this is based on the factor of time namely long term and short term financing. One of the more common and widely used form of the latter includes what we call commercial bridging finance.

Providing what people refer to as bridge loans, it is a type of interim financing arrangement that allows borrowers to attain short term funds to fulfill their short term liquidity needs by connecting a need coming due and one’s bigger and permanent source of funds.

But despite of its widespread use, several myths continue to haunt commercial bridging finance so we took it upon ourselves to go bust these misconceptions. After all, how will people realize the benefits it can bring if they are filled with lies that fuel their misunderstanding about the service? To keep our facts straight, here take a look.

“They pile more debts.”

Although a type of loan, it’s not safe to assume that they’re just another liability. They’re unlike any other as they are a type of interim finance. Eventually, they will be closed by one’s main funding source the moment it becomes available. Because they are temporary and short term in nature with a period of often between two weeks to three years, it becomes less burdensome.

“They’re only meant for commercial asset acquisitions.”

Commercial bridging finance is specifically designed and catered for investors and entrepreneurs who wish to buy assets for office and business purposes. However, bridging loans in general can be used for an array of different purposes.

“They are financially hefty.”

A loan, regardless of type and size is a legal and binding obligation. But that doesn’t mean that they are all burdensome. Others may be but there are those that prove useful and beneficial instead of a burden just like bridge loans. They do come with interests but what makes them a delight to use lies in their short term and temporary nature. After computation, they prove to be cheaper since the interest rate is applied to a lesser number of months or periodic intervals.

“Paying them is difficult and meticulous.”

This is the most outrageous and silly of misconceptions about commercial bridging finance. Flexibility comes with these loans in terms of repayment. Borrowers have the option to pay it out before maturity as early as they can and want to or at maturity once permanent funding has been released and made available.

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Bridging Loans Benefactors

bridging-loansDon’t we all just love perks? Who doesn’t anyway? It’s no surprise that people would always gravitate to things that would add value to their plate. It’s a primal instinct. We do away with danger and cling to what’s comfortable and advantageous. The same is true when it comes to the business of real estate. Whether you’re in it for the profit or for personal reasons, it’s something we’re bound to come across at least once in our lifetime. Speaking of which, have you ever wondered who benefits from bridging loans?

Also known as bridging loans, this form of short term finance acts on the interim. This means that it serves as a connection between immediate needs and the main means of funding. In majority of cases, it is used to provide for pre-purchase costs necessary to make the acquisition possible such as research expenses, professional fees, security deposit and down payment to name a few.

Because real estate purchases cost quite a lot, investors need ample time to gather their financial resources. But because the market is highly competitive, it puts a lot of people at a disadvantage especially when their main source is not yet ready and the asset they’re eyeing on is also of interest to others.  By now, we all probably know that the first buyer who drops the security deposit and down payment almost always gets the property. Now with such type of financing, who gets the most benefit?

  1. Investors/Landlords – For the business-minded who engage in the trade and/or leasing of properties, it becomes a stepping stone. Investors and landlords would want to expand and improve their investment portfolios and this is a tool used in its accomplishment. Surely they’d want the best assets but the prime ones are always at a competitive edge with everyone wanting to grab hold. With property bridging finance, investors and landlords get the chance to reach the finish line first even if their credit application or resource pooling is still being processed.
  2. Residents – A lot of individuals and families buy their homes by putting the current up for sale or applying for some type of credit like a bank loan or a mortgage. Both instances take a lot of time which can hamper the moving process and become a disadvantage. To hasten things up and be able to provide for the upfront costs, bridging loans are used. Once the sale of the current asset is closed or the credit has been approved, they are then used to pay for the bridge as well as the remaining balance of the property.
  3. Businesses – Others make use of a bridging loan to acquire assets for their business operations. Such is the case for a good majority of companies. Because time is of the essence and waiting isn’t exactly an option, it becomes a means to quicken the pace. More on loans at

What are bridging loans in the UK?