FEATURE
BUSINESS BANKING & FINANCE ADVERTISEMENT FEATURE
Bridging finance tips for businesses
Mark Finucane (pictured), regional development director for the Midlands at Together, explains how businesses are increasingly using bridging finance
Record numbers of short-term loans were written in the last financial year – with the annual figure breaking the £3 billion target for the first time, according to industry experts. Data published by the Association of Short Term Lenders
showed that the market continues to gather pace with a hike of more than 7 per cent in the year to June 2017. The second quarter alone saw a record high of £875 million written, a 12.1 per cent increase when compared to the first quarter of the year, showing the continuing strength of bridging finance lending. Historically, bridging loans have mostly been used for
property; often to repair broken chains or to purchase property quickly. However, increasingly, SMEs are turning to this flexible form of finance to raise capital for a much wider variety of purposes. Here are a few tips on how businesses can make the most of short-term finance.
TO SEIZE AN INVESTMENT OPPORTUNITY Time is of the essence when it comes to commercial deals, whether it’s to buy into a new venture, or acquire another business, bridging loans can be arranged in extremely tight timescales, sometimes a matter of days.
TO FACILITATE A MANAGEMENT BUYOUT When opportunities arise for a buyout, funds are often needed fast to avoid negotiations being drawn out longer than necessary. The short-term finance can then be repaid and the business finance restructured once the new management team is in place.
TO PROVIDE FUNDS FOR RELOCATION A bridging loan can be ideal for businesses that are looking to relocate, securing the chosen property and also helping with the associated costs, such as removals, furniture and IT. A bridging loan may save company from dipping into their own cash reserves to fund the move.
TO RELEASE CASH-FLOW Bridging finance can also be a great way of creating cash- flow by releasing equity; often against a residential property. This can be particularly popular with start-ups that may struggle to get long-term finance until their business is fully-established.
TO REFINANCE EXISTING DEBTS Refinancing can help small businesses by consolidating existing debts into one and making them easier to manage. Often, refinancing can help businesses to pay off creditors and maintain relationships with key suppliers, which can be crucial for the company’s reputation.
For more information contact Mark at
mark.finucane@
togethermoney.com, or call on 0121 396 1451.
Find out more at
www.togethermoney.com
‘Bridging loans can be arranged in extremely tight timescales, sometimes a matter of days’
50 business network November 2017
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