Commercial uses for bridging loans

Like private individuals who are moving house and have gaps in their sale chain, businesses may also require bridging finance during commercial property sales and purchases to also bridge gaps in sale chains. Bridging gaps in sale chains is wrongly thought by many to be the sole or main use of bridging loans.

There are many uses for bridging finance and this is particularly so for businesses and commercial enterprise who use commercial bridging loans for a large variety of different purposes.

Businesses may use commercial bridging finance to provide them with an urgent cash injection into their business when their own customers are unexpectedly late paying their invoices, resulting in funds being urgently required to pay bills, wages or tax demands. Once the late invoices have been paid the bridging loan can be repaid. Should the invoices not be paid for some unforeseen reason, such as the customer going out of business, then the bridging loan may have to be repaid by taking out a long term finance facility.

Some businesses may use commercial bridging finance to fund exceptionally large orders. In order to be able to fulfil a large order finance maybe required to buy materials and pay wages. Once the order has been completed then there maybe a delay until their customer makes payment. A commercial bridging loan may allow a business to fulfil an order that they otherwise may have been unable to provide due to lack of funds. Whether or not a bridging loan could be available to the business can be found out quickly with a simple phone call together with information about the costs of a suitable bridging facility. Then being in the financial position to be able to accept and complete the order will obviously therefore mean extra profit for the business and a happy customer.

Building and construction businesses along with anyone else involved with property development may use bridging finance to provide the funds required for property renovation, conversion or expansion, in addition to building new properties. Bridging loans are popular for these purposes because the bridging lenders who provide this type of bridging finance are happy that the property may be just land or a derelict shell. However, it is worth remembering that development loans may also be an option for financing these types of projects. So it is worth while comparing the two options to find out which would be most suitable along with which option would be the cheapest.