The Benefits of Bridge Loan When You Need Loan Urgently

The Benefits of Bridge Loan When You Need Loan Urgently
The Benefits of Bridge Loan When You Need Loan Urgently
July 13, 2016

Short term loans are often the most difficult to obtain. Banks will be more delighted to give you long term loans than short term because of the interest they would enjoy over time. If you are in need of a short term loan and it seems that banks do not want to see your face, bridge loans is an interim short term financing that you can run to till you get the needed long term loan.

Opportunities can necessitate you to take up loans

Let us say, there was an auction for a very important property which, you are optimistic, will fetch you good money in coming years, but you discover that you do not have enough money at present to pay for it. Will you forfeit the property? Definitely not! At such points, you will need a short term loan to complete the payment.

Read also: Merits and Demerits of Purchase Money and Non-purchase Money Loans in Short Sales

Reasons for short term loans are numerous

There are many other reasons that can necessitate you taking up loans which include immediate payment of taxes, securing a property, a sudden cash crisis in your business and so on. There are also personal pressing problems. For example, there is an emergency when someone has been taken to the hospital and certain deposits need to be made. Short term loans come handy in settling immediate problems.

Traditional loans take a long time to be processed

Commercial banks have a long list of documents that must be presented before the processing of a loan can commence.  Some of these documents may not be readily available to you and in the process of trying to acquire them the deadline may catch up with you.

Read also: A Cash Business Loan might Just be Perfect for a Working Capital

Bridge loans are ready in 48 hours

Commercial banks usually take a lot of documentation and signings before the money can be released to you. However, bridge loans are processed speedily and you can be sure to get your loan in 48 hours. There are times when you can get the loan that same day. At this speed, you can be certain to beat any deadline.

It forms a bridge between buying and selling properties

When you want to buy a new property by selling an old one, it may happen that the money realized from selling the old property will not be enough to secure the new one. Bridge loans, at such times, will cover the lapse in finance and guarantee you the new property.

Read also: What You Never Knew about the Small Business Administration Loans

The temptation of unwillingness to pay back is removed

When you hold money for a long time, there is the temptation that you may begin to feel the money belongs to you and forget to may plays for repayment. Bridge loan takes away this temptation because from the onset, you are well informed that the loan is interim which will make you struggle to pay back on time.

Your asset can serve as collateral

In bridge loans, you do not really need all the long paper works. Any asset that you have ranging from jewelries, house, shop, flat, land and so on can serve as collateral for obtaining bridge loans. You can also stake multiple assets as the case may be.

Read also: Looking for Ways to Finance Your Company: Try Asset Based Lending

Article highlights

  • Commercial banks favor long term loans more than short term ones.
  • Short term loans keep the zeal to pay back burning.
  • The processing time for traditional loans is unbearable.
  • Bridge loans can take as short as a day to be processed.
  • Assets can be used to secure bridge loans.
  • Bridge loans are interim loans to fill the vacuum while waiting of a long term loan.
  • Emergencies further highlight the need for short term loans.
  • Bridge loans can be used to pay for auctions and secure properties.
  • There are times when businesses are cash strapped and need immediate funds.
  • It is easier to pay back long term loans than short term.

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