When it comes to bridging loans, an important thing to bear in mind is that they don’t just have to be used to buy property; they can also be used as short-term business loans, with the caveat of knowing you will have the finances to pay the loan off afterwards! They can be useful in a number of ways if you’re needing some extra liquid capital in your business or if you’re looking to expand.
You want to change premises: If you want to change your company’s office or licensed premises, but don’t currently have the funds to do so, bridging loans can help you do it in much the same way as when buying a new home! It can be used to buy a new office space with a great deal while you secure the funding over the long-term. The bridging loan can be taken out with your office space used as collateral for the loan so you won’t be personally liable if any problems arise with it.
You want to start-up a business: If you’ve found a gap in the market with a great opportunity, or have just built your own start-up but need the capital to get moving forward, then bridging loans can also help you. They can be used to help you build your vision or original product in order to take to investors as an opportunity to invest in a new company. This investment can then be used to pay off the bridging loan! Just be aware, this is a very risky strategy as there’s no guarantee your product or service will be needed by the market or that you’ll find interested investors!
You want to take advantage of a marketing opportunity: If your business doesn’t have spare cash lying around but you have a small window of opportunity to take advantage, such as if you want to upgrade your marketing during a busy season at Christmas, then a bridging loan can be used to do that. The loan can be taken out in order to spend on marketing and advertising during the busy period to increase revenue, and that can then be used to pay the loan back off. Again, another risky strategy, but it works superbly in subscription based businesses!
You want to renovate your existing commercial premises: Again, the same as if you’re buying a new property to re-sell or rent, you can use a bridging loan to renovate your commercial premises. You can put your premises up as collateral for the loan and use it to renovate. Depending on the type of business you have, this will likely increase revenue generated and allow you to pay off the bridging loan at a later date.
Hopefully this post has given you some ideas on how to use a bridging loan to improve your business, and if you have any questions for us, feel free to get in touch to ask us more!