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Anybody who has ever arranged bridging finance for a residential property purchase will know how complicated the entire process of application can be, the situation is significantly more complex when it comes to arranging commercial bridging finance. Personal finance lenders consider bridging finance to be one of the most risky forms of lending; this statement is doubly true for commercial lenders.

There are however, some great opportunities for a knowledgeable commercial finance broker to arrange bridging finance that is not only cost effective, but will cover 100% of the actual property cost, making the capital investment for the short term an incredible 0%. Intrigued? Let’s take a look at how this is achieved.

Firstly we need to consider valuation, by choosing a lender that will allow the borrow to work from the open market value of the property, rather than the actual purchase price, the loan to value amount increases, which means that the actual loan is for an amount close to what you are actually paying for the new property. Many high street lenders will refuse to work from the purchase price and refuse to recognise such things as a good deal and any possible built-in equity in the new building.

Some lenders will also allow the borrower to roll the interest into the bridging finance, which means that no repayments will be due, as they have already been added to the loan value. This is a great way to secure a property which is going to take some time to secure, as your business will not need to find hefty load repayments each month.

It should be noted that this form of borrowing is primarily aimed at those needing to secure bridging finance in the form of a closed bridge, which, means that contacts have already been signed for the property deal, those who are seeking an open bridge will find matters far less flexible and may only be able to acquire 70% of the cost of purchase through bridging finance.

Whichever form of bridging finance you are seeking, either open or closed bridge, it is highly recommended that you seek out the advice and guidance of a qualified, professional commercial finance broker, they will be able to help you with preparing the mountain of supporting documentation that will need to accompany your application, including a well thought out business plan and fully audited accounts. A good broker will also have access to a far wider range of lender, and be able to source the most effective product for your needs, they will also act as the front line of communication between your company and the lenders themselves, this alone is worth the brokers fee, as dealing with commercial lenders is renowned as being complicated and drawn out. If you wish to secure your bridging finance in the shortest possible time, you are going to need a commercial finance broker to assist you with your bridging finance application at every stage.

As a result of an increasing commercial financing crisis, commercial borrowers are evaluating new alternatives for business finance funding. Business cash advances and credit card financing are two working capital financing options which have proven to be effective and practical sources of operating cash for small business owners.

The use of credit card financing often refers to business cash advances in which working capital is obtained by business owners based upon future credit card processing activity. Alternatively the use of personal credit cards to obtain a cash advance is also referred to as a credit card loan. With business finance funding shortages, small business owners are increasingly using both approaches to obtain operating cash for their business. The two financing approaches are not equal in terms of how they are viewed by commercial financing experts although the strategies might be called by the same name occasionally.

Business lines of credit and other variations of working capital loans have been recently cancelled or reduced by many commercial lenders. In response, many business owners have been forced to rely on cash obtained via their personal credit cards to sustain their businesses. In order to prepare for several of the most undesirable actions being taken by many credit card loan lenders, we urge all commercial borrowers to review the predatory lending discussion in The Working Capital Journal.

For business owners using or about to use personal credit cards to secure operating capital, we want to make two important comments: (1) We consider this to be a last resort method of business financing and whenever possible it should be avoided. Before assuming that this is the only source of capital available, commercial borrowers should consult with a working capital finance expert. The possibility of business cash advances and working capital loans should be thoroughly explored. (2) This questionable method of obtaining commercial finance funding will prove to be increasingly more difficult because credit card issuers are already cutting back on their unsecured lending programs.

Like reductions in their lending programs for business lines of credit, most banks are now making similar cutbacks in credit card lending. They are reducing or cancelling credit lines even when borrowers have a superb payment record. The rationale for banks reducing both credit card lines and commercial lines of credit is similar. With unsecured commercial loans or personal loans, banks fear that massive defaults are almost inevitable due to a very shaky economy and business lending climate. Unlike residential real estate financing in which real property is pledged as collateral, banks know that they have no collateral to fall back on with working capital loans and credit card loans because they are unsecured. Many small business owners use home equity lines of credit to obtain operating cash, and these funding sources are also diminishing in most areas of the United States. Although these lending programs are backed by collateral, the value of homes in many areas has decreased to the point that many outstanding loans exceed the current property value.

One of the most disturbing and frustrating occurrences in the current difficult commercial financing environment is the lack of clear information for many business owners about which funding options are realistic and possible. Thousands of borrowers might have obtained operating cash from personal credit cards when there were better options for this one factor alone (confusion and misinformation).