Expanding a Company, How Bridging Finance can be Used
They say that the best jobs are the ones that you make for yourself; you’re your own CEO, you can play by your own rules and you’re the one in control. The wealthiest people in the world are they people who took the initiative to become their own CEOs and build their own companies. However deciding to expand your business into a company is a risky move and not many have the courage to go through with it. However, every now and then, a company will be daring and take their chances.
One such company? Samsung; now ‘the world’s biggest information-technology firm’. It started off making only humble transistor radios in 1969. Thirty-two years later, it is grossing $23 million dollars. But did they settle, even after such success? No. Mr. Lee (Samsung’s CEO) reinvested their sales and used their assets as capital with the goal of turning Samsung into the number one information-technology company. And the risk paid off. What do we have to learn from Samsung’s story? In order to become big, we must spend big. Or in other words, big capital investment, as risky as it seems, is a risk worth taking.
Although not many can aspire to be as big as Samsung, many of us can still grow our business (via franchising and expanding). All we need is capital; using what we have to make more. However, sometimes we don’t have enough; we might need more than our own assets, there aren’t enough investors or banks are simply unwilling to lend to a start up company. This is where bridging finance comes in.
Bridging finances (or bridging loans) are short term loans that are most commonly used as pseudo credit or capital. Bridging loans are taken out when a client is expecting a large influx of cash but need credit or capital to keep them running until then, essentially ‘bridging’ the gap between the lack of finance and future profits (with the expected money used to pay off the bridging loan).
Bridging finance can help you kick start your company by giving you capital to put back into the company so that it may grow. After the capital investment brings back profit, the bridging loan can be repaid with the returns and the profits can be used as new capital.
Expanding a business into a company is a large and daunting step for any business man or entrepreneur. There are many risks that one has to take and many things that one has to take into consideration. However, if you have the potential and the ambition, bridging loans can make it happen.
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