Small business owners may rely to fund early stages of their operation. This is particularly common in developing countries and the UAE. Some companies may struggle to receive a loan in time to cover relevant expenses. If you are in such a situation, bridge financing may be the solution.
As its name suggests, bridge financing is an interim funding solution structured as a short term loan that’s exited or satisfied through a specified near-term, pending payment, transaction. Lasting between six months to one year such a loan provides the business owner with a solution to critical transactions. Unlike traditional loans, bridge financing is generally offered by private lenders. As such, it can be a challenge to find a willing lender. Credico’s bridge financing solution aims at closing the gap between your current shortfall in working capital and your conventional funding or income proceeds. We can help you fulfill unanticipated orders and ensure that your business growth is not stagnated due to a lack of immediate funding. Additionally, those who choose Credico Capital can be certain of a reasonable credit underwriting process. To learn more, reach out to us by dialing +97143344652 for Dubai or +442076924837 for our London desk.
HOW DOES IT WORK
When immediate funding is unavailable, a bridge financing 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 supply chain financing.
There are several differences between a bridge loan and a traditional loan. Perhaps most notably, a bridge 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 to carry higher costs than traditional loans. Interest rates vary from lender to lender. Another significant difference between the two is that bridge financing 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.
BENEFITS OF BRIDGE FINANCING
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 solution. Of course, this is not its only benefit. With Credico Capital, you can equip yourself with the necessary funding at reduced cost.
01 Swift Approval
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 with Credico Capital.
Although bridge financing is intended to be a short-term solution, it can help to cut down on your overall operational costs. With Credico Capital, a company may qualify for financing of up to 80% loan to value ratio. It is why so many people in Dubai and beyond pledge real estate when applying for a bridge loan.