Bridge loans play an important role in business financing beyond their popularity with real estate speculators and property developers. Any company can use them to finance practically any need, provided you understand how. The first thing you need to realize is that this is a whole category of loans, with individual programs catering to a narrow range of use cases. It can take some time to find your best fit for a loan provider.

Property Renovation

If you own a property and it needs some renovations or even full rehabilitation before your business can use it, the value of that property can be used to finance the operation. This is really useful when you have a storefront or a workshop that has been operating and needs a refresh. Retail operations use them for rebranding every few years and sometimes even for the working capital needed for seasonal redecoration. Manufacturers use them to handle issues like HVAC upgrades or building expansions.

Bridge Loans for Operational Capital

You can also use your real estate holdings to manage your cash flow through the business. Many programs that have this use case in mind offer terms of up to three years, and a few offer longer-term operational asset loans for up to five years. The idea is to set a budget period that is a bit longer than the loan using its capital, then use incoming money to pay off the principal early.

Extra time left after the loan is paid and before the budget expires represents a window where earnings are basically pure profit. Once a new budget period rolls around, you just refinance the property again.

Buying a New Building With a Bridge Loan

Real estate investors like bridge loans for a reason. If you could not use them for acquisitions, the investors would not want them, and there’s no reason your business should not use them the same way. If you are looking for a new income property to establish extra lines of revenue, you can use a bridge loan to close quickly before renovating it for clients and refinancing it into a long-term loan that lets you operate profitably.

You can also close on a property that needs work before you move in, then renovate it and refinance it into the commercial mortgage you need to make your monthly overhead manageable. This is a great way to get out of a lease and into a property your company owns. Start reviewing your options today.