Business Acquisitions With Bridge Loans
Purchasing an existing business can be a great and lucrative investment. The employees, customer accounts, and management systems are already in place, and not much work needs to be done. However, while the financing for the major purchase is still in the pipeline, there are still immediate costs which need to be addressed to ensure a smooth transition. Because of this, many entrepreneurs use bridge loans for business acquisitions.
Financing Business Acquisitions
The immediate costs of business acquisitions can vary, but they usually fall into a few universal categories. There are operational costs – being able to keep the lights on, maintain cash flow, and meeting payroll. Customer obligations, such as filling and shipping orders. After the paperwork has been signed, if there isn’t financing to cover these immediate costs, business acquisitions can come grinding to a halt, and cause entrepreneurs to lose money on the investment.
How Bridge Loans Work For Business Acquisitions
Bridge loans can be arranged quickly and can be customized to fit business acquisitions of all sizes. Many business owners figure in the amount of capital needed to cover immediate costs when applying for larger financing, so bridge loans can be repaid quickly once the larger financing is made available. Bridge loans have no prepayment penalties, which means if a business is in a position to pay off the balance ahead of schedule, they will not be walking into a double indemnity clause, unlike traditional bank loans.
Types Of Business Acquisitions
Bridge loans work really well with a wide variety of business types. The most popular is when purchasing existing franchise operations. Bridge loans can keep things running so the franchise continues to generate revenue during the transition. Manufacturing and healthcare facilities absolutely require bridge loans to cover immediate costs, because neither industry can afford to close down for any period of time. Office space and retail stores can also benefit, while new business owner settle into their new roles or bring over other employees, in the case of expansion.
If you are looking to purchase an existing business, and would like more details about bridge loans, call CounselPro Lending at 1-888-292-3322. Our team of financial experts is committed to providing the right funding solution to cover your capital needs. Give us a call and let us work for you.