Bridge Financing is a short-term loan facility offered to business firms and corporate in order to cover a discrepancy of the requirement of funds arising due to a lack of long-term funding option. Hence as the name goes by, bridge financing is used to bridge the gap between the requirement of funds and the sanctioning of long-term financing options. Not only do the banks provide bridge financing mississauga, but also do the investment banks and various informal lenders in the credit market.
Types of Bridge Financing
A bridge loan is a bridge financing route in which, the short-term funding requirement of the client is done in the form of a loan. This short-term loan comes at a high-interest rate, as the requirement of the funds by the client is crucial to it.
-Equity Bridge Financing
If you are sure to be a profitable firm, then only this option can be opted by you. You may not want to go for a high-interest bridge loan and at the same time, you are not able to attain a long-term equity finance funding, then equity bridge financing Mississauga is the right option for you. You can get this type of financing from venture capitalists who are always in search of profitable avenues of equity investments.
Benefits of Bridge Financing
A bridge loan is beneficial to you in many ways. Firstly, it allows you to not miss any opportunity that has exclusively occurred in your course of business. For example, you are in the business of real estate and you expect a sudden boom in the real estate market, and you may have the shortage of funds in order to take the maximum benefit out of the opportunity, then bridge financing Mississauga shall be the right thing for you to do. Secondly, you may not have to look for individual partners or other forms of partnership so as to fulfill the requirement of funds in your business. Most importantly, bridge financing funds can be availed much quicker than the other forms of borrowing from banks and other financial institutions.