Private lending is an excellent tool for business financing. Consider bridge loans, for example. We provide such loans to businesses and entrepreneurs throughout Salt Lake City. We are not afraid to offer a bridge loan to a business owner attempting to get a small business administration (SBA) loan.
SBA loans bring a lot to the table. Unfortunately, among their drawbacks is a lack of speed. It can take what seems like forever to get an approved SBA loan funded. Meanwhile, a business in desperate need of financing is left to hope that the opportunity being pursued is still available when the funding finally comes through.
Bridge loans from private lenders, like Actium Partners, can be funded much more quickly. As such, any business that stands a good shot of being approved for an SBA loan is likely a good candidate for a bridge loan.
Why SBA Loans Take So Long
One of the major differences between traditional banking and private lending is speed. Banks are almost always slower than private lenders. But when you’re talking SBA loans, you have the added element of dealing with the government. That slows things down even more.
When you apply for an SBA loan, you do not sit down with a government loan officer you hope will approve your loan and write you a check from the U.S. treasury. No, you still go to a bank. The government authorizes banks to offer SBA loans on its behalf. The banks facilitate and administer SBA loans with government backing.
Knowing that banks can take several weeks to approve traditional loans, and even longer is necessary for SBA loans. An exceptionally complicated loan application could take much longer. Depending on your circumstances.
How Bridge Loans Work
Bridge loans are intended to be temporary funding in anticipation of future financial resources. In other words, you may have received preapproval for an SBA loan and now you are merely waiting for the bank and its government partners to complete the process. Unless something earthshattering changes your circumstances, you will have your SBA funding a few months from now.
A bridge loan can provide immediate funding to bridge the gap between now and when your SBA loan comes through. The idea is to obtain bridge funding now, then repay the private loan with SBA funds. To secure funding, you put up some sort of collateral with a value equal to, or greater than, the amount of money you want to borrow.
- Bridge Loans Are Faster
This all boils down to the fact that bridge loans can be funded much faster. Bridge loans are primarily approved on the basis of collateral. Let us say a client offers us a piece of property as backing for a bridge loan. It only takes us a short amount of time to appraise the property and do the necessary due diligence to ensure the client’s SBA loan is likely forthcoming.
We can do what we need to do in days. It doesn’t take us a month or two. As soon as the loan is approved, it can be funded by whatever means is best for the client. What it takes the SBA a month or longer we can do in days.
If you are planning to get an SBA loan but you need funding now, let’s talk. Actium Partners funds a full range of business opportunities throughout the Salt Lake City area.
