By Brad MacLiver
Authorship and profile at Google
With the changes in the CO pharmacy industry independent drug store owners, small and regional pharmacy chains inColorado
Bridge Loans are a short-term financing option and are used while waiting for permanent financing, or the next stage of financing to be obtained. Bridge loans provide funding to "bridge" the gap between a company’s current needs and their long term financing requirements. Permanent financing is generally used to "take out," or pay back, the bridge loan.
One of the characteristics of a bridge loan is that they can close quickly, which in turn allows a company to capitalize on a timely business opportunity, or acquisition. The quick access to money can also allow a business the chance to avoid penalties, bankruptcy, or other temporary problems. If longer term issues need to be dealt with, this “transitional financing” provides the company time until longer term financing can be secured.
Another characteristic of bridge loans is that the process usually requires less documentation than conventional financing. Bridge loan lenders don’t usually have the same government regulations to adhere to, so they tend to have more flexibility in their lending criteria and the documentation they require. However, less documentation does not mean they won’t perform due diligence to have a comfort level with the transaction before they fund.
Here are some examples of using bridge loans inColorado
1. An independent pharmacy owner learns about health issues and makes a decision to quickly sell the family owned CO pharmacy to an employee or local competitor. More traditional financing for the pharmacy buyer might require a time line that is not acceptable when considering the circumstances. A bridge loan can be taken out to quickly accomplish the transaction.
2. A small pharmacy chain requires $1 million to expand their business. They have three new equity investors who will be investing into the firm over the next six months, but at different intervals. However, the business has opportunities which necessitate action sooner than 6 months. The quick closing bridge loan allows the pharmacy chain inColorado
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a greatColorado
4. A pharmacy group developing new CO pharmacy locations can receive bridge loan funding to get through the permitting process of a project when conventional financing isn’t available at this early stage due to there is still too much risk. A bridge loan permits the project to move into the construction phase and then qualify for various other forms of financing.
5. When aColorado
6. Real estate or equipment bought at auction may have a tight window for closing the deal and timing of traditional financing would keep buyers from proceeding with the opportunity. The benefits of a bridge loan permit the pharmacy owner to quickly respond to the opportunity.
When there are opportunities for business, pharmacies being bought or sold, quick deadlines, an old loan maturing before a new loan can be put in place, funding needs during the permit, planning, or evaluating stages, etc., bridge loans can be an invaluable financial tool.
Some more tips regarding pharmacy bridge loans:
1. Although bridge loans are quick to obtain, they are quick to expire.
2. Hard money loans are similar to bridge loans and the terms are often used interchangeably in conversations. Both are short-term, higher interest rate, non-standard loans, but in some circles hard money refers to the lending source and a bridge loan refers to the duration of the loan.
3. Because bridge loans usually come with higher interest rates than traditional financing a larger down payment, meaning a lower Loan to Value (LTV) and a lower level of risk and provides an opportunity for lower interest rates.
4. With the shorter time period of bridge loans borrowers will need to be aware that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period than traditional financing transactions.
Understand the types of deals that require a bridge loan may be considered speculative in nature, or have higher risk factors. Due to this many banks do not offer bridge loans. Banks must meet government regulations and need to justify their lending practices. Riskier bridge loans do not usually fall within the lending parameters of many banks. Therefore a majority of the bridge loans will come from private investment firms. It is best to consult a company that has access to a number of funding sources who provide bridge loans.
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Authorship and profile at Google
With the changes in the CO pharmacy industry independent drug store owners, small and regional pharmacy chains in
Bridge Loans are a short-term financing option and are used while waiting for permanent financing, or the next stage of financing to be obtained. Bridge loans provide funding to "bridge" the gap between a company’s current needs and their long term financing requirements. Permanent financing is generally used to "take out," or pay back, the bridge loan.
One of the characteristics of a bridge loan is that they can close quickly, which in turn allows a company to capitalize on a timely business opportunity, or acquisition. The quick access to money can also allow a business the chance to avoid penalties, bankruptcy, or other temporary problems. If longer term issues need to be dealt with, this “transitional financing” provides the company time until longer term financing can be secured.
Another characteristic of bridge loans is that the process usually requires less documentation than conventional financing. Bridge loan lenders don’t usually have the same government regulations to adhere to, so they tend to have more flexibility in their lending criteria and the documentation they require. However, less documentation does not mean they won’t perform due diligence to have a comfort level with the transaction before they fund.
Here are some examples of using bridge loans in
1. An independent pharmacy owner learns about health issues and makes a decision to quickly sell the family owned CO pharmacy to an employee or local competitor. More traditional financing for the pharmacy buyer might require a time line that is not acceptable when considering the circumstances. A bridge loan can be taken out to quickly accomplish the transaction.
2. A small pharmacy chain requires $1 million to expand their business. They have three new equity investors who will be investing into the firm over the next six months, but at different intervals. However, the business has opportunities which necessitate action sooner than 6 months. The quick closing bridge loan allows the pharmacy chain in
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a great
4. A pharmacy group developing new CO pharmacy locations can receive bridge loan funding to get through the permitting process of a project when conventional financing isn’t available at this early stage due to there is still too much risk. A bridge loan permits the project to move into the construction phase and then qualify for various other forms of financing.
5. When a
6. Real estate or equipment bought at auction may have a tight window for closing the deal and timing of traditional financing would keep buyers from proceeding with the opportunity. The benefits of a bridge loan permit the pharmacy owner to quickly respond to the opportunity.
When there are opportunities for business, pharmacies being bought or sold, quick deadlines, an old loan maturing before a new loan can be put in place, funding needs during the permit, planning, or evaluating stages, etc., bridge loans can be an invaluable financial tool.
Some more tips regarding pharmacy bridge loans:
1. Although bridge loans are quick to obtain, they are quick to expire.
2. Hard money loans are similar to bridge loans and the terms are often used interchangeably in conversations. Both are short-term, higher interest rate, non-standard loans, but in some circles hard money refers to the lending source and a bridge loan refers to the duration of the loan.
3. Because bridge loans usually come with higher interest rates than traditional financing a larger down payment, meaning a lower Loan to Value (LTV) and a lower level of risk and provides an opportunity for lower interest rates.
4. With the shorter time period of bridge loans borrowers will need to be aware that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period than traditional financing transactions.
Understand the types of deals that require a bridge loan may be considered speculative in nature, or have higher risk factors. Due to this many banks do not offer bridge loans. Banks must meet government regulations and need to justify their lending practices. Riskier bridge loans do not usually fall within the lending parameters of many banks. Therefore a majority of the bridge loans will come from private investment firms. It is best to consult a company that has access to a number of funding sources who provide bridge loans.
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