FAQ
Bridging finance is a short term (1-12 months) advance against monies still to be received by you from a variety of sources For a business owner, bridging finance refers to short-term funding to cover costs while you wait for expected funds to be released from debtors or sales In South Africa, bridging finance can also refer to the proceeds of a property sale. Based on the sale of your property, a lender will grant you a portion of the proceeds of the sale.
To access bridging finance, you will need to prove to the lender that you are set to receive funds. In other cases, you can access bridging finance to purchase goods. This means the lender might pay the supplier on your behalf.
Bridging finance must be backed up by some sort of asset or security such as debtors, properties, motor vehicles, or investments.
The expected funds are repaid directly to the lender from the source. Bridging finance repayments include the original amount you borrowed, plus the fees/interest of the bridge loan.
The exact time frame depends on the lender and the type of bridging loan you need.
When it comes to property sales, and advances against hard assets you could have access to your bridging finance in a few hours.
In South Africa, some banks provide bridging finance so business owners can cover cash flow gaps. Remember that banks might require collateral or restrict the use of your bridging finance, e.g., must be used to pay suppliers directly.
Business funding specialists at TWH Consult recommend you have clear time frames for when you need the bridging finance. If you need capital urgently to take advantage of a business opportunity, you will need bridging finance immediately. You will need to prioritise fast access to funding.
SMEs are often held back by inadequate cash flow. Bridging loans smooth the ups and downs that come with running a business.
Bridging finance closes the funding gap for small businesses and individuals. A bridging loan gives you the funds to take advantage of new opportunities, like expanding your business, pursuing a new contract, or buying a new home