Business bridge loans are like a stopgap for business finances: They offer short-term cash flow coverage for basic but essential expenses while you wait for additional funding. Whether it’s due to unpaid invoices, slow insurance claims or a simple cash crunch, learning the basics of bridge loans can help you meet your financial obligations on time without busting your budget.
All of these common uses for bridge loan financing fall under the same category: working capital. As a small business owner, working capital is absolutely crucial to daily business operations and determines the short-term health of your finances.
Working capital is defined as the difference between a company’s current assets (like cash and accounts payable) and its current liabilities (like salaries, debt and pending bills). If the most pressing liabilities outweigh current assets, a business could be staring down the barrel of a cash shortfall. This could lead to a host of serious problems that put future operations in jeopardy.
However, many working capital shortages are no fault of a business owner. Bridge loan financing offers a solution to some common scenarios in which small-business owners might find themselves short on working capital.
We all try our best to make timely payments, and small or local establishments especially prefer to give their customers the benefit of the doubt when due dates pass by. But at the end of the day, you are relying on those payments to keep the lights on.
Every company needs to expand, but growth costs money: You need more employees, more space, more time. Even if your business renovating plans are bulletproof, that doesn’t mean your current cash flow is up to the task.
Buying inventory requires a lot of upfront costs to cover before your products are sold. This can be especially challenging for businesses that incur seasonality in their sales. Plus, securing the best prices may require buying inventory during a narrow window of time.
When a natural disaster strikes or any kind of accident happens that causes major damage to your property, you might rely on an insurance policy to cover that loss. However, even the best insurance providers could take days to process a claim – precious time when you have work to do and bills to pay.
The uses highlighted and many more business situations make excellent candidates for business bridge loans. QuickBridge leaves no question about our specialty in this area – it’s in our name. With optimal bridge loan pricing for small businesses and a straightforward application process, QuickBridge is the solution for your most urgent working capital and cash flow needs.