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Bridge Loans

The most affordable programs in the private sector

Bridge financing (otherwise known as bridge funding, bridge capital, interim financing, or gap financing) is a type of loan that acts as a temporary fix to help businesses cover their expenses until they can obtain a longer-term financing solution. Usually, bridge loans are secured by collateral in the form of real estate, receivables, or a personal guarantee. Additionally, the loan terms for small business bridge financing normally range from 6 to 12 months.

Bridge financing is a useful tool for business owners to use when they anticipate that their funds will run dry in the near future while, at the same time, expecting a larger injection of capital not too long after that; small businesses can use bridge funding to “bridge” the financial gap between those two points. It is also a great option for businesses with “seasonal” cash flow.

You can avoid finding yourself in a struggle to climb out of a valley of debt with bridge funding. Use it as a financial fix that will help you stay in the black until a more permanent solution can be arranged.

As a small business owner you may find yourself at times waiting on a lump sum of money either from receivables or services rendered via a contract. You may also be waiting on funds from a traditional loan source such as SBA or Conventional financing. When this happens it makes covering your weekly expenses such as payroll stressful. It is during these instances that a long-term loan may not be the best fit and you may not need to borrow the funds for more than just a few months.  Instead of locking your business into a high interest long term loan, Mint Financial’s Bridge Loans are the perfect solution for times when you need short-term funding with early buyouts (payoffs).

Loan Amounts

Varies

  • Short term variable amounts
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Loan Terms

6 to 12 months

  • Typically from a few weeks, up to 12 months
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Interest Rates

As low as 1.99%

  • Mint Financial offers Bridge Loans with true monthly interest costs starting as low as 1.99%
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Bridge financing is short-term financing aimed to provide funds to companies until they obtain long-term financing.

Bridge loans can be an invaluable tool for small business owners, helping to address cash flow emergencies before they snowball into bigger issues. Securing a bridge loan is fast, easy, and offers a temporary fix for just about any financial mishap.

You might have received working capital and not even realize that you could be using this money as bridge financing. A bridge loan is financing you can use to bridge the gap between getting paid at the start and end of a project. Many business owners in the construction or service industry are paid in installments so they use bridge loans to ensure that they have money on hand in between payments. If your business operates like this, then we encourage you to use your loan as bridge financing.

You can use bridge loans in numerous ways, here are some of the best ways.

  • Inventory – using a bridge loan for inventory will allow you to be fully stocked so that you can complete each project. Running out of inventory can stop the process you are making so do not risk this.
  • Payroll – if you cannot pay your employees, they will get upset. Even if your business is paid in installments, it does not mean that you can pay your employees. They will leave and try to get a job somewhere else. Bridge loans will allow you to have enough money for payroll so that you and your employees can focus on completing your jobs.
  • Equipment – without reliable equipment, your business cannot complete projects and could even lose out on it completely. A bridge loan can come in handy, and the money will let you repair or update your equipment if necessary.
  • Work on Multiple Projects – having bridge financing means you can afford to take on additional jobs. You might have been only able to finance one project at a time. With a bridge loan, you can pay for the various costs needed to do multiple projects.
  • Accept Bigger Projects – you could tackle larger jobs than you could in the past. It can be challenging to finance a large project if it requires more inventory, time to complete or more employees to your team. Bridge loans give you the opportunity to do so much and expand your business to grow.

Bridge loans can feel like lifesavers to many business owners. However, making any decisions, you’ll want to consider the pros and cons:

Pros

  • They’re quick to fund. If you’re approved for the loan, you have access to that money almost right away, usually within one week. In other words, you won’t have to wait months for the coverage you need right now.
  • They’re short-term loans. You typically pay the loan off within one year, meaning it isn’t a looming burden in the back of your mind for years to come. Once you pay it off using the cash influx you expect to receive, you’re done with it.
  • You can choose repayment options. As the borrower, you get to decide if you want to pay off the loan before or after your long-term financing is secure. However, this might depend on the lender, so choose one that matches your preferences.

Cons

  • They’re difficult to obtain. These loans are more difficult to secure from your average bank. Additionally, you’ll need exceptional credit and equity, and a low debt-to-income ratio. Because of the precarious nature of bridge loans, lenders are especially strict about giving them out.
  • They’re pricey. Bridge loans have both higher interest and transaction rates. If you don’t pay them off in a timely manner, you’ll rack up interest quickly.
  • They’re risky. When you take out a bridge loan, you’re counting on an influx of money to help you repay it quickly. If one transaction falls through and you can’t pay back the loan, you’ll land yourself in hot financial water.
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