A bridge loan can provide short-term financing for your business. It is a temporary source of funds that can help you meet your immediate financial obligations.
Bridge loans are usually paid off with the money that you receive from another source of finance.
These types of loans get their name from the function they perform. They provide you with a financial “bridge” that allows you to meet your cash flow requirements while you wait for long-term funds.
Let’s understand how you can get a bridge loan for your small business and how you can use it. We’ll also discuss the merits of a Camino Financial Small Business Loan and how it can be used as a bridge loan.
How to get a bridge loan
Banks and credit unions offer loans that can be used as bridge loans. There are also many online lenders and alternative lenders who provide this type of financing.
Which financial institution should you select?
The choice can be difficult as many of them offer similar products, and it can be hard to understand the financial jargon that they use. Here’s how you can simplify the process of picking a lender:
How quickly will the funds be available?
In most instances, your primary consideration will be speed. You want funds to meet an immediate requirement.
Before deciding on a lender, ensure that the promised cash will be available when you need it. Traditional financial institutions like banks can be slow to approve your loan application. Online lenders have automated processes that are much faster.
Cost of the bridge loan
These loans can be expensive. In addition to the interest cost, you may be required to pay additional fees and expenses. Read the fine print of the agreement before you sign on the dotted line.
The lender could ask you to put up some collateral
This is the security for the loan. If you don’t repay, the lender will have the right to seize the collateral and sell it to recover its loss.
Collateral may take the form of your business assets, your car, or your home. You may also need to provide a personal guarantee.
Check for prepayment penalties
This is the extra amount that you have to pay to the lender if you want to pay off the loan early.
Why should you have to pay a penalty if you are prepaying the loan? The reasoning that a lender uses is that it will be deprived of part of its profit if you prepay.
Can Camino Financial loans be used as bridge loans?
A Camino Financial Small Business Loan offers all the advantages of a bridge loan while providing several additional benefits as well.
Here’s what you get if you decide to borrow from us:
The advantages of a Camino Financial Small Business Loan
|Speed||You can find out if you prequalify immediately. If your loan application is approved, we can provide you with funds within 2 business days.|
|Minimum requirements||If your business was established at least 9 months ago, you’re eligible to apply. Your sales should be more than $2,500 a month.|
|Credit (FICO) score||There’s no minimum requirement.|
|Credit history||Applicants without a credit history are eligible to apply for a loan.|
|Interest rates||Our small business loans carry interest rates that range from 12% per year to 24.75%. How much will you have to pay in monthly installments? Use this calculator to find out.|
|Loan payback period||24 to 60 months.|
|Maximum loan amount||$400,000|
|Collateral||No collateral is required for funding.|
Our motto, “No business left behind,” is our guiding principle. Our loan approval process has been devised in a manner that helps small businesses that find it difficult to raise loans from traditional sources.
For example, loan applicants with no credit history may still be eligible for a loan from Camino Financial. Additionally, we don’t require borrowers to provide us with collateral. We also focus on helping Latino entrepreneurs.
How you can use a bridge loan
One of the lowest-cost sources of capital for a small business is an SBA loan. This is a loan that is guaranteed by the U.S. Small Business Administration (SBA), a government agency that provides support to entrepreneurs.
However, SBA loans have a lengthy and cumbersome application process. It can take several weeks or even months to receive funds.
Similarly, bank loans and loans from your local credit union provide a low-cost financing option. But these also usually have a long-drawn approval procedure.
How can you take advantage of the low rates of interest that SBA loans and bank loans offer if you need funds immediately?
Bridge loans can provide the solution.
A bridge loan could help you to meet your immediate requirement, and you could repay as soon as you receive funds from your SBA loan or bank loan.
In what situations can you use a bridge loan?
Business owners typically use bridge loans for real estate transactions. You may get the opportunity to buy commercial property at an attractive rate. But the seller could require immediate payment. It could take several weeks to arrange a low-cost bank loan.
In this situation, a bridge loan could provide a way out.
A bridge loan could also be used to acquire inventory at rock-bottom rates. A competitor may be closing down, and you could get the chance to purchase the rival company’s stock at a fraction of its value.
A bridge loan could provide you with the funds that you need for this purpose.
Get a bridge loan today
Bridge loans can serve a useful purpose. They can provide your company with the funds it needs to take advantage of a new business opportunity. They could also provide you with short-term money while you wait for the funds that you are expecting from another source.
A Camino Financial business loan can serve the same function as a bridge loan. In fact, our small business loans are far superior to the bridge loans offered by other financial institutions.
Apply for a business loan from Camino Financial today. You’ll know instantly if you prequalify and it doesn’t affect your credit. Our loan specialists will work with you to get you the best possible terms.