There can be no doubt that the UK is still quite away from being back on track, following the unfortunate events of the past couple of years. The pandemic’s lingering shockwaves are likely to be felt for some time and the country as a whole is now neck-deep in a near-unprecedented economic crisis.
But even as all this is going on, the UK’s SME community is showing extraordinary resilience. Smaller businesses are demonstrating the kind of tenacity that is no less than inspiring and looking to the future with confidence.
Consequently, the bridging finance sector is being inundated with inquiries from SMEs and entrepreneurs. But what is it about turbulent times like these that cast such a favorable light on bridging finance?
Flexible and Affordable Funding for Smaller Businesses
One of the biggest drivers of skyrocketing bridging finance activity is the distinct lack of accessible and affordable services available on the High Street. For smaller businesses in particular, securing cost-effective funding to weather temporary financial shortfalls can be difficult.
This counts double where time-critical outgoings and purchases are concerned, which are often impossible to fund via conventional channels.
Bridging finance is designed to effectively ‘bridge’ the gaps in the usual High Street offerings. It is a fast, flexible, accessible and affordable alternative to conventional loans, mortgages, and commercial lending products.
Importantly, bridging finance can be used for almost any legal application whatsoever. Some of the most common uses for bridging finance within the SME community include the following:
• Purchasing stock to fill orders or to cope with the growing demand
• Covering staffing costs and purchasing essential business equipment
• Funding the expansion or diversification of the business
• Paying unexpected tax bills to avoid penalties and a potential legal action
• Setting up subsidiaries and getting new business start-ups off the ground
As for what it is that makes bridging finance such a popular choice for these kinds of applications, there are several unique benefits to bridging loans over more conventional forms of business finance:
There are few (if any) funding solutions available on the High Street that are nearly as quick to organise as bridging finance. With all required paperwork and documentation in place, it is possible to arrange and access a bridging loan within a few working days. This makes it a uniquely useful facility for covering time-critical costs and making urgent purchases.
Unlike most conventional business loans, bridging finance can be used for any legal purpose whatsoever. There are no specific restrictions placed on how the funds can be allocated, giving the business total flexibility with regard to how the money is spent.
Eligibility requirements for bridging finance are fairly relaxed. You simply need to have assets of sufficient value to use as security for the loan and provide evidence of a workable exit strategy. Even applicants with poor credit or a history of insolvency can qualify for affordable bridging finance. However, good credit and a credible financial track record can pave the way for the most competitive deals.
Repaid promptly, bridging finance can be a uniquely cost-effective facility. Interest applies on a monthly basis and is typically charged at a rate as low as 0.5%. The more promptly a bridging loan is repaid, the greater the affordability of the transaction.
For more information on any of the above or to discuss the benefits of bridging finance in more detail, contact a member of the team at Bridgingloans.co.uk today.