By Brad MacLiver
Authorship and profile at Google
With the changes in the CT pharmacy industry independent drug store owners, small and regional pharmacy chains inConnecticut
Bridge Loans are a form of short-term financing that can be used while waiting for either permanent financing or the next stage of financing to be obtained. Bridge loans provide funding that "bridges" the gap between a company’s current needs and their long term financing requirements. Permanent financing is generally used to pay back or "take out" the bridge loan.
One of the characteristics of a bridge loan its ability to close quickly, which, in turn, gives a company the ability to capitalize on a timely business opportunity or acquisition. This quick access to cash gives a business the chance to avoid problems like penalties or bankruptcy. If longer term issues need to be reconciled, this “transitional financing” provides the company time until more long-term financing can be secured.
One more 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.
Examples of using Bridge Loans in Connecticut Pharmacy Transactions:
1. An independent pharmacy owner learns of health issues and decides to quickly sell the family owned CT pharmacy to an employee or local competitor. Traditional financing for the pharmacy buyer may require a time line that is not acceptable when considering the circumstances. A bridge loan can be used to quickly accomplish the transaction.
2. A small pharmacy chain inConnecticut
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a greatConnecticut
4. A pharmacy group developing new pharmacy locations in Connecticut 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 allows the project to move into the construction phase and then qualify for other forms of financing.
5. When a pharmacy is owned by two or more partners and one of the partners is ready to exit the business, a bridge loan can help ensure the cash flow and uninterrupted operation of the business during the partner buyout.
6. Real estate, or equipment bought at auction may have a narrow window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. Benefits of a bridge loan will permit theConnecticut
When there are business opportunities, buying CT pharmacies, selling pharmacies, 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 essential financial tool.
Tips regardingConnecticut
1. Bridge loans are quick to obtain, but quick to expire.
2. A bridge loan is similar to a hard money loan 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 CT pharmacy industry independent drug store owners, small and regional pharmacy chains in
Bridge Loans are a form of short-term financing that can be used while waiting for either permanent financing or the next stage of financing to be obtained. Bridge loans provide funding that "bridges" the gap between a company’s current needs and their long term financing requirements. Permanent financing is generally used to pay back or "take out" the bridge loan.
One of the characteristics of a bridge loan its ability to close quickly, which, in turn, gives a company the ability to capitalize on a timely business opportunity or acquisition. This quick access to cash gives a business the chance to avoid problems like penalties or bankruptcy. If longer term issues need to be reconciled, this “transitional financing” provides the company time until more long-term financing can be secured.
One more 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.
Examples of using Bridge Loans in Connecticut Pharmacy Transactions:
1. An independent pharmacy owner learns of health issues and decides to quickly sell the family owned CT pharmacy to an employee or local competitor. Traditional financing for the pharmacy buyer may require a time line that is not acceptable when considering the circumstances. A bridge loan can be used to quickly accomplish the transaction.
2. A small 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 pharmacy locations in Connecticut 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 allows the project to move into the construction phase and then qualify for other forms of financing.
5. When a pharmacy is owned by two or more partners and one of the partners is ready to exit the business, a bridge loan can help ensure the cash flow and uninterrupted operation of the business during the partner buyout.
6. Real estate, or equipment bought at auction may have a narrow window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. Benefits of a bridge loan will permit the
When there are business opportunities, buying CT pharmacies, selling pharmacies, 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 essential financial tool.
Tips regarding
1. Bridge loans are quick to obtain, but quick to expire.
2. A bridge loan is similar to a hard money loan 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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