Steps to finding ways to repay bridge capital

Written By Steps To Faculty Published July 28th, 2010

The demand for bridge capital has increased over the last two years as businesses must repay their loans and/or sell property to avoid auctioning of their hard-earned investments and business ventures. Bridge capital is a short term loan used to finance businesses and residences in between long-term funding. It acts like a bridge between one finance instrument and another. Given the complex economic times, many business owners are now having trouble repaying their bridge capital loan. If you find yourself in this situation, do not despair. There are five ways to repay bridge capitals.

Step 1 Borrow again

Use the next level of financing. Since the bridge capital is only meant to carry your business for a short time by bridges the gap between your current financing and the next level of financing. You must negotiate a better second round of financing before getting a commitment to repay the bridge capital. However, be sure to have a plan to repay the second bridge capital loan from your business.

Step 2 Use short term profits

Use short-term profits to repay bridge capital. This means you must refrain from any spending and expenses to the minimum basics because the your business is in live support and you must never risk any more spending before the next financing is available.

Step 3 Use credit

Use credit instruments and increase credit periods of repayment by negoitiating with creditors. This ensures that you r use of credit terms periods allows time to use credit products and get payments thereby using the short time profits to repay the bridge capital while cushioning the business from start up capital crunches associated with lack of creditor confidence.

Step 4 Trade in your accounts receivables

Accounts receivable is good financial instruments if used wisely. YOu can use accounts receivables to factor the terms of the repayment terms. Factoring allows you to collect cash before your customer pay or by your debtors based on the receivables. The lender of this money are now in charge of your collections and charge up to ten percent of your receivable. But you are able to use this to repay your bridge capital commitments.

Step 5 Build your credit

Finally use the experience to build your credibility and creditworthiness to get the next level financing to meet the long-term needs of your business as well as the strategic capital reserves for future contingencies.

You can also sell of some assets to repay bridge capital or you can renegotiate terms of repayment if you are in dire straits. Please visit stepsto.com for more great business advice.


Roger Due

Investing in Your Destiny® & Coaching Program - Wealth Building Summit Dallas, Texas

My name is Roger Due and I am from Albuquerque, New Mexico and I am the owner of the Monsano software company. This has been an absolutely fantastic conference. This is the best I have ever been to.