When entrepreneurs think of bridge loans, most think of utilizing them for commercial real estate. However, when initiating a leveraged buyout, bridge loans can be extremely useful for allowing a smooth transition – whether it is into a larger facility, or absorbing resources and adding them to your own. We are going to take a look at how bridge loans can be used in a leveraged buyout while other acquisition financing is still in the pipeline.
Bridge Loans Keep The Momentum Going
When a leveraged buyout takes place, there are immediate expenses to keep the business running so operations within the business being bought out do not grind to a halt. Payroll must be met; inventory and supplies need restocking; and open customer orders still need to be filled. While larger financing is still in the pipeline, bridge loans can keep everything running “just as it was” until the transition has been finalized and your business take over completely.
Bridge Loans Can Help Leveraged Buyouts Move Faster
Quite frequently, when there is a leveraged buyout, all plans need to be put on hold until loans and other financing are fully processed. Bridge loans can take care of the immediate costs, and go toward moving your equipment and employees over to the newly bought out company. Additionally, bridge loans can be used for new advertising, marketing campaigns, and restructuring the company to direct new assets to handle a larger customer base.
Bridge Loans Can Be Arranged Quickly
Bridge loans are designed for time-sensitive business opportunities, and can be arranged quickly, when compared to traditional bank loans. Additionally, bridge loans can be customized to fit the size and scope of your leveraged buyout. Most business owners figure the amount of bridge loans into the amount asked for in long term financing. Since there are no repayment penalties or fees associated with bridge loans, entrepreneurs can pay off the balance with a portion of the larger financing when the funds are disbursed, which keeps liabilities on the balance sheets to a minimum during a leveraged buyout.
Are You About To Initiate A Leveraged Buyout?
If you are thinking about buying out another business, and would like more details about bridge loans, call Abel Commercial Funding at 301-200-9801. We work with growth-focused businesses of all sizes to match them with the right financing to help them reach their goals.