There are many different industries in Florida, but what they all have in common is a need for capital. Regardless of whether your company handles sales, manufacturing, construction or another area of business, you need funds to increase growth. Bridge loans are an amazing tool for increasing your company’s working capital on demand. This type of financing is popular with Florida companies of every size, from small businesses to large corporations.
What Are Bridge Loans?
Before we get into the specifics of what type of industries benefit most from bridge financing, it’s helpful to understand more about this type of funding option. Put simply, a bridge loan is a short-term loan designed to provide flexible working capital quickly. Sometimes, bridge financing is used to handle business emergencies, but most of the time it’s simply an everyday financial tool that companies use to manage their cash flow.
What Industries Benefit the Most From Bridge Loans?
Many companies like the freedom that gap loans provide. In Florida, bridge financing is especially helpful for four industries.
Manufacturers have a front-loaded business model. They have to invest money at the beginning of a project to purchase a large number of raw materials for production, in addition to paying dozens or hundreds of employees.
These businesses don’t get paid until after the production process is finished, goods are shipped and invoices are paid. This timeline can last over a month from start to finish.
Gap financing can be an enormous help. With a bridge loan, manufacturers can get sufficient capital to pay for raw materials, cover payroll and take care of operating expenses. Once the client pays, a portion of the revenue can pay off the financing and the rest is profit.
Another industry that has an ebb-and-flow relationship with income is construction. From general contractors to electricians, virtually all construction businesses have to purchase materials at the start of a project, take care of necessary permits and pay a large team of employees and subcontractors.
Contractors usually don’t receive payment until the project is complete, which can put a squeeze on available capital, especially if unexpected problems such as mold appear. Fortunately, with bridge financing, construction businesses can keep operating smoothly no matter what.
Real estate businesses, house flippers and develops use bridge financing a little differently. Here, the objective is to get a large amount of capital quickly to close on the property. After that, it’s possible to transfer the short-term loan balance to a long-term loan, or sell the property and pay off the bridge loan with the proceeds.
Several companies fall into this category: landscapers, plumbers, janitorial companies, HVAC contractors, interior designers, automobile repair shops — even doctors. Many of these businesses have cash flow issues, especially small businesses. Bridge loans help stabilize your cash flow and provide money to keep running your company without problems.
How Can Bridge Loans From HML Solutions Help Your Business?
Get the financing you need quickly and easily. Make decisions that benefit your company without constantly having to check if you have sufficient funds available. Contact our team right away to learn more.