Are you looking for bridging finance to cover gaps in your cash flow?
Every entrepreneur knows the anxiety that comes with a shortfall in business funding.
But it doesn’t need to be this way.
Bridging finance solves business owners’ cash flow problems quickly, providing fast, short-term business finance within hours.
Instead of immense personal stress and worry, you’ll be free to pursue your most ambitious business goals.
In the article below, we discuss the benefits of bridging finance. If you’re only after a quick summary, bridging finance is a type of business funding that covers costs while you’re waiting for expected business funding. You can access bridging finance in 24 hours with Lulalend.
How Does Bridging Finance Work?
You’ve told us the biggest impact of not being able to quickly access capital includes:
- Missed opportunities to grow
- High levels of stress and worry
- Unable able to market business properly
And there are just those periods in your business; moments when your immediate needs outstrip your available capital.
Perhaps you’re facing hefty unexpected expenses. Maybe there’s a gap between paying your suppliers and getting paid by your clients.
And it’s usually even worse at month-end.
Business owners, like Andrew Nkhoma, frequently find themselves waiting on payment.
“I run a repair shop… and parts are very expensive to buy…in most cases, I have to pay for the parts and receive payment later from insurance and clients,” said Nkhoma.
Growing businesses, in particular, often struggle with cash flow shortfalls, explained Heidi Alson, Lulalend Business Funding Specialist.
“Business owners in the retail sector tell me they’ve invested in inventory to help grow. But, now they’re waiting for that stock to sell so they can start turning a profit. For other business owners, they’ve just secured a new contract, but they need a new piece of equipment to deliver the goods.”
This is a stressful scenario that plays out across industries; gaps in cash flow that derail planning, add unnecessary stress and hinder business growth.
“You know the money’s coming in, but you need a short-term business funding boost to tide you over,” said Alson.
So, it’s no surprise that the number one barrier to growth for businesses is a lack of cash flow.
That’s according to the 2019 National Small Business Survey, by the National Small Business Chamber Initiative.
It’s easy to accept this cycle as part and parcel of the unpredictability that goes with entrepreneurship.
There’s a better way.
Bridging finance is a type of finance used to cover costs while you’re waiting for expected funds.
It’s a form of business funding that’s especially useful for high-growth businesses.
In such cases, cash flow can help cover your costs in the short term for investments that you expect a return on in the near future.
3 Business-Growing Benefits of Bridging Finance
Here are three benefits of bridging finance:
- Consistent cash flow
Instead of stress-induced cash flow ups and downs, bridging loans bring instant certainty to your business finances.
It’s the kind of assurance that lets you take advantage of opportunities for growth.
Many business owners choose a business line of credit to deal with a spike in demand.
Lulalend’s credit facility gives business owners the ability to access cash flow right when they need it.
Plus, unlike credit options with traditional lenders, Lulalend’s facility imposes no initiation, admin, or credit life charges.
2. Fast access to flexible bridging finance
Bridging finance might seem like an answer to all your cash flow problems.
There’s a caveat, though.
Applications with traditional institutions might take weeks or longer. So, the process might still be dragging on long after you needed the money in the first place.
We know if you’re after bridging finance, you want it fast.
So, when you apply for business funding with Lulalend, you’ll get the cash in your account in 24 hours. For business owners who have a credit facility, accessing business funding is as easy as initiating a withdrawal from their online account.
Because the business funding is flexible, you’re free to use the bridging finance for any business need.
Even better, you don’t need to attach any assets as collateral.
Prioritise bridging finance options that pay out quickly.
3. Pay early and save
Fast access to finance is necessary for growth. But, sometimes, that capital comes at a cost.
There are short-term lenders that impose high-interest rates in exchange for quick, easy access to bridging finance.
And if you want to settle early to avoid higher fees, you’ll be saddled with early payment fees. So, study the options carefully before you decide on the right business funding product for your needs.
At Lulalend, costs are transparent. Instead of being penalised for early payment, you’ll save.
For example, business owners who take bridging finance of R100 000 only pay around R4,500 if they want to pay back the amount a month later. (The exact cost depends on your credit score and affordability.)
So, rather than putting a strain on your cash flow later, this kind of payment structure won’t place pressure on your business finances further down the line.
Bridging Finance Helps Business Owners Expand
Bridging finance brings peace of mind.
For business owners like Nkhoma, bridging finance has solved the cash flow challenges of waiting for payment from clients.
“Lulalend comes to the rescue in minutes and their loans are paperless with no complications, (they) have rescued my company twice now.”
So, you no longer need to worry about missing an opportunity to grow. You no longer need to lose sleep over cash flow while you wait for the money.