Services > What is Bridging Finance?

Merchant Factors

Bridging Finance

Merchant Factors' bridging finance solutions help you during periods where business is slow. Access to necessary funding can be the difference between your company closing down or closing a major deal.

How bridging finance helps your business

Bridge financing closes or ‘bridges’ the gap between the time a company’s money will run out (when waiting to make sales) and when it can expect to receive an infusion of funds and is for short-term working capital needs.

If a company believes (and can prove) that if it can continue to grow and achieve profit over the next 12 months, but only has capital for 6 months (operating expenses) – bridging finance can be given to the company for working capital.

As the name suggests, bridging finance serves as a ‘bridge’ when a company is anticipating a future cash flow but has current financial obligations to attend to. Bridging finance is a smart alternative when more traditional lenders have slow turnarounds or are too rigid.

This asset-backed form of financing used to maintain liquidity while waiting for an anticipated and reasonably expected cash inflow.

How a bridge loan is determined

The loan amount, term and other factors all determine the structure of a bridging transaction with every situation being different. Merchant Factors can tailor a bridging transaction to suit your unique situation

Benefits of Bridging Finance

Bridging finance is ideal for the periods where business is slow and business owners struggle to keep organisations afloat without any revenue.

Bridging finance solutions allow an organisation more flexibility to take advantage of new opportunities more quickly, and at a time where funds are possibly limited. This is highly beneficial as your business waits for an inflow of funds from sales but certain immediate costs need to be met.

Bridging finance is ideal when certain operational costs such as staff’s wages, running costs and specific organisational costs are required need to produce your product or service.

Benefits of Bridge Finance

    4 Benefits of Bridging Finance

  1. Capital is received quicker than a conventional loan
  2. Gives your business time for a sale to go through in order to make profit
  3. Buy out partners in order to receive more flexibility
  4. Flexible payback options

Bridging finance is commonly provided for short periods of time,usually between 3 and 24 months.

Merchant Factors and bridge financing

Merchant Factors realise that each one of their clients have different needs at various points in their business life cycle. We recognise that streamlined cash flow is often the difference between a profit and a loss. Bridging finance provides much needed relief for countless businesses who await their ‘Gold Rush’ period but still have overheads and operational costs to pay for in the interim

Similarly, bridging finance is ideal for those looking to invest in property and want to take advantage of a rare deal which they cannot ordinarily afford as they are waiting to sell another property.

More about bridging finances

For many businesses, customers failing to pay on time are a common problem. This puts a business under severe financial strain and affects the ability to buy new inventory, pay employees’ salaries, amongst a number of other things

Bridging finance allows your business to grow effectively without worrying about delayed cash inflows.