Small business owners regularly rely on loans to fund the early days of their operation. It is particularly common in fast developing countries and the UAE, where the day-to-day costs of running a business can be quite high. Unfortunately, some companies may struggle to receive a loan in time to cover the relevant expenses. If you are in such a situation, bridge financing may be the solution.
As its name suggests, bridge financing is intended to fund a company’s activity when the said company is in between loans. It is a short-term form of funding, and in most cases, last between six months to one year. Such a loan provides the business owner with ample time to obtain a more long-term solution. Unlike traditional loans, bridge financially is generally offered by private lenders. As such, it can be a challenge to find a lender worth of your trust. Credico's Bridge Financing solution is aimed at bridging the gap between your current shortfall in working capital and your future conventional funding and income proceeds. We can help you fulfill unanticipated orders and ensure that your business growth is not hampered due to a lack of immediate funding. Additionally, those who choose Credico Capital can be certain of reasonable interest rates and collateral requests. To know, reach out to us on +971-4-521-7560.
When immediate funding is unavailable, a bridge finance loan provides the business with the necessary capital needed to fulfill and place orders. As mentioned, it is a short-term loan that can help cover immediate requirements, such as paying your company’s mortgage. Once a new long-term investment has been acquired, a portion of that loan can be used to repay the initial loan.
There are several differences between a bridge loan and a traditional loan. Perhaps most notably, a bridging loan cannot be obtained from a bank. As discussed above, it can usually only be obtained from a private party. Additionally, such a loan tends to have a higher interest rate than a traditional one. Interest rates vary from lender to lender. Another significant difference between the two is that bridge finance requires physical collateral, unlike bank loans. As for repayment, clients can either choose to pay off the loan at once or make partial repayments over a set period of time.
To some small business owners in the UAE, bridge financing may seem like a bit of a risk. Bridge financing does have its drawbacks; however, a company that is confident it can turn a profit from its bridge loan can pursue it without hesitation. The most significant advantage of bridge funding is that it provides short-term financing while you search for a long-term investment. Of course, this is not its only benefit. With Credico Capital, you can equip yourself with the necessary funding at reduced interest rates.
Bridge financing is usually obtained from private lenders. It means you won’t have to worry about the red tape associated with traditional bank loans. The application process for a bridge loan is quick and painless, especially when done through Credico Capital. Approval and receipt of funds are similarly swift.
At Credico Capital, we provide high-net-worth individuals with Personal bridge loans to address their financial needs. They are often used by buyers who wish to purchase a new home before their own home has sold. Many businesses similarly use bridge financing while searching for a new office space.
Although bridge financing is intended to be a short-term solution, it can help to cut down on your overall operational costs. If needed, a company can get investments of up to 80% of the value of its collateral. It is why so many people in Dubai and beyond pledge real estate when applying for a bridge loan.