How to Utilize Your Bridge Financing for Business Growth
What is a bridge loan?
You may have received additional working capital, and not even realized that you could be using this money as bridge financing! A bridge loan is financing you can use to bridge the gap between getting paid at the beginning and end of a project. Many business owners in the construction or services industries are paid in installments, so they use bridge loans to ensure that they have money on hand in between payments. If your business operates in this way, we encourage you to use your loan as bridge financing!
Ways to use bridge financing:
There are many ways to use bridge loans, but here are our top suggestions!
– Inventory: Using a bridge loan for inventory will guarantee that you are fully stocked so that you can complete each project. Running out of inventory could halt the progress you’re making, so don’t risk this!
– Payroll: If you can’t pay your employees, they may stop showing up for work! Even if your business is paid in installments, that doesn’t mean that you can pay your employees in this manner. They’ll likely try to find a job elsewhere, that consistently pays them. Bridge loans will allow you to have enough money for payroll, so that you and your employees can focus on completing your jobs.
– Equipment: Without reliable equipment, you won’t be able to complete projects, and could even lose out on it completely. That’s where a bridge loan comes in handy. This money will enable you to repair or update your equipment if necessary.
– Work on multiple project at once: Having bridge financing means that you can afford to take on additional jobs. Previously, you may have only been able to finance one project at a time. Now, you can pay for the various costs needed to perform multiple jobs at once.
– Accept bigger projects: In addition to signing on for multiple projects, you may be able to tackle larger jobs than you could in the past. It can be challenging to finance a large project if it requires more inventory, time to complete or additional employees. Luckily, a bridge loan gives you the opportunity to expand your horizons!
Bridge loans: the future of your business
Now that you can answer the question ‘what is a bridge loan?’ and know how to use it, you’re ready to grow your business. If you’ve already received bridge financing, we hope that these ideas will help you take advantage of your loan!
Editorial Note: Any opinions, analyses, reviews or recommendations expressed in this article are those of the author's alone, and have not been reviewed, approved, or otherwise endorsed by any of these entities.