Our previous blog gave you the ins and outs of how commercial bridging finance works. Bridge finance is a convenient way to raise short term capital quickly, but is it the right solution for you?
A Short-Term Working Capital Loan to Bridge a Cash Flow Shortage Gap
Do you want to expand your business, but cash flow is limited? Bridging finance gives your business a cash injection when you need it most. It allows you to offset a short-term loan against your property while awaiting funds from another source, for example, proceeds from the sale of a property, cash on delivery payment for a large order, or securing a bank loan. As the name implies, it helps you to “bridge the gap” between current obligations and amounts receivable.
There are dozens of scenarios where your business needs a cash boost fast, but liquid funds are just not available. That’s when a short-term bridging loan may be the solution.
Do You Want To Take Advantage Of The Stable Rand?
The fluctuations in the economy and our Rand bouncing back and forth like a tennis ball can make budgeting for imported goods difficult. If you want to purchase goods while the exchange rate is in your favour, but your cash is tied up in current inventory, a bridge loan is a viable solution.
Has Your Staff Compliment Outgrown Your Premise?
Business growth can be a double-edged sword. Sometimes growth happens faster than anticipated. Before you realise it, your staff compliment has doubled or tripled, but you have remained in the same premises. You are expecting a cash injection from investors in a few months, but your office is bursting at the seams, so you need to move now. You can use a bridge loan against your current property to purchase a larger one.
Are You Looking To Expand Your Product Line?
Research and development are done, market projections are in, and customer surveys are complete. Your proposed new product is ready to be rolled out ahead of schedule—the perfect time to take advantage of the gap in the market. However, the funds are not available as the timeline shifted, and you’re still in the process of securing finance from the bank. Bridging finance fills the gap allowing you to start production in the interim.
What happens once you’ve decided a bridging loan is your best option?
The first step is to ensure that you meet the minimum criteria. Property-backed loans are only available to juristic persons and the property securing the loan must be a primary, either residential or commercial, property. The bond will be transferred over to Transaction Capital Business Solutions until the loan is repaid. A loan can be no smaller than R250 000 taken over a 6 to 12 month period with interest being served in 3 ways depending on your unique requirements.
Your business’s future is very important to you. Transaction Capital Business Solutions has over 60 years of experience in helping South African companies likes yours to achieve growth through innovative cash flow funding solutions.
Don’t worry if you think you don’t meet the minimum criteria. Transaction Capital Business Solutions is dedicated and committed to helping as many South African businesses as possible reach their growth potential.