The role of bridging finance has become an increasingly common way for businesses to collect finance. For a decade, the amount of money lent by bridging has risen considerably. You may have felt the need for some additional fund/capital for your expansion, relocation or even property development.
It occurs mainly in such companies of Singapore where payment is received in installments or after the project as in the case of building, property developers or real estate companies. What happens, in this case, is due to post payments that the owners lack with the fund to finalize the project. This situation requires business owners to borrow from creditors or they have is to go to banks and Non-bank Financial Institution like Capitall Singapore for a bridging loan.
What is Bridging Finance after all?
This is a kind of short-term financing used to ‘bridge the gap’ of the company’s short-term cost. It’s a popular option especially when business owners wanted to purchase a new property. The loan can be repaid once the old property has been sold. It is a much more convenient loan offer than using a traditional mortgage loan.
A bridge loan helps cross the gap between the need for short-term cash and long-term credit. This loan is usually extended from a tenure of at least one year to a tenure of at most two years. These loans generally require some assets like equity in the form of collateral or protection.
This business loans Singapore would benefit those entrepreneurs who face cash crunches and have a secured source from which they will be able to raise funds shortly. This can be their client, or it can be amount due payments they will soon get.
How can businesses raise bridging loans?
Bridging may be used by business owners, but ideal by buying land or properties. For instance, if you are trying to buy new offices and your company is rising rapidly, you can put your office space down as collateral to secure the loan.
As a short-term financing option, going to the bank involves complex process and with bridging loan from licensed moneylenders is much more convenient. You can buy your chosen property with bridging loan without dealing with a lot of requirements. And you don’t have to worry on how to repay for it. As it finances you in short-term, you will have the time to sell for another property. They may also find your bridging finance thorough the Capitall Singapore.
Benefits of a Bridge Loan for a business
Size. Any company that goes to a bridge loan receives little support from either a bank or an investor that lets them expand a lot when they need it. It helps them to succeed next to this in the market, helping them to prosper.
Secure in Nature. This loan is a highly secure option. The protection shall be provided in any asset (property) form. The lender has the right to take over the collateral rights if the borrower is unable to repay the lending.
This decreases the borrowers’ risk factor, and they can lend flexibility easily, since they are a straightforward deal between the owner of the business and the lender. The borrower does not face some kind of difficulty when borrowing from any relative/friends or other borrowers of money.
Needs catered by Bridging loan
As the company grows and their demand for their products and services increases, business owners look for another location or for a new property. With bridging financing, it can help in acquiring for new property for expansion or relocation plan. If they plan to move in for a bigger building, bridging loan can help them find a suitable. And this loan can be repaid when the old one will be sold.
Most of the companies apply for a bridging loan to renovate their properties. Building refurbishments cannot only help with the aesthetics but it helps business owners in adding value to their properties. Thus, when they apply for remortgage their property, it can have a higher value.
Bridging financing can be best taken advantage by property developers or those who wanted to work on a real estate business. Sometimes applying for a traditional loan could be difficult but with bridging financing from moneylenders they have access to purchase their chosen property. As they developed it without any delays, they can sell it and move to the next. With this type of financing, they will have more funds to buy for other properties.
An opportunity you do not want to miss
If you’re looking for a business loan Singapore then you can take on major ventures. When the project is going on, getting a bridge loan provides you with money and you lack the funds. Anyhow you will be getting money at the end of the project. So, you can quickly repay the loan from there. This helps the company prosper and grow.