Bridge financing, with its short-term and flexible nature, is a linchpin for SMEs in various scenarios where immediate financial needs outpace the availability of long-term funds.

Bridge financing’s value lies in its ability to ensure continuity. While it’s a versatile tool, it’s imperative for borrowers to have a clear exit strategy, given the higher costs associated with this form of financing.

Typical situations where such bridging is particularly beneficial include :

Property transactions: business expansion: mergers and acquisitions: startups awaiting investment or other equity financing might opt for a bridge loan to keep operations running seamlessly during the interim.

Like any other loan, Phoenix loans the money at a fixed interest rate, on a period agreed by the borrower. We typically expect our bridging loans to be repaid within a maximum term of 12 months. However, the borrower can normally choose to pay off the loan at any time within the 12 month time period, if they are able to gain access to the next stage of financing that they require. The timing of repayment normally depends on the type of bridging loan.

The main difference between a regular loan and a bridging loan is the time it takes to organise the funding. It can take months for a regular lender to complete a deal, but our bridging loans can be ready within weeks or even days. Mainstream lenders often require more information from the applicant and the company. Phoenix takes a much more simplistic view of the process. Our focus is on the property that is used to secure the loan, and the proposed exit strategy to repay the loan.

Bridge financing is the short-term loan that a business can use to navigate a financially difficult period. This temporary financing can cover necessary costs until longer-term financing is achieved, hence acting as a ‘bridge’ between other finance solutions.