7 Tips for Finding the Best Bridge Loan Lenders for Your Business

Published March 29th, 2024 by River Point Capital

Imagine running a company that has no issues keeping its team motivated and providing outstanding customer service. However, you constantly find yourself dealing with financial issues.

Financial strain can easily cause your company to fail, which is why it's essential to explore the right types of business loan options.

Bridge loans are amazing options in most circumstances, but not everyone understands how they can find the best ones for their situation. Let's explore the key information you should keep in mind when looking for the best bridge loan lenders.

1. Explore Testimonials

This is one of the most useful ways you can narrow down your potential options. Client testimonials are far more informative than client reviews.

 More often than not, they can answer all of the questions you have and address underlying concerns. However, you should pay close attention to the legitimacy of the testimonials.

 If they seem overly sales-oriented or contain many of the same keywords, it's best to continue your search elsewhere. With enough due diligence, you'll find a company with genuine testimonials that can deliver the right business funding options.

2. Leverage Your Professional Connections

There's a good chance one of your professional contacts has used bridge loans in the past. They can provide a firsthand account of what it was like to work with them.

 Ensure you ask about key details like their repayment terms, interest rate, and the level of support the lender provided. You should also ask your contacts if the lender requires collateral for the loan.

 It's best to continue your search until you find a lender with suitable terms. If you don't have a professional contact who can point you in the right direction, don't feel discouraged. Searching for a lender online is a great place to start.

3. Can You Pre-Qualify?

Pursuing pre-qualification can streamline your search for a lender. This works by inputting certain information online to determine if you're pre-qualified for a loan. If so, you can skip a large amount of the application process (such as proving your income).

 This can save you a substantial amount of time, and it can also help you quickly find a lender who's willing to work with you. It can be highly frustrating to apply to many different lenders only to get denied after filling out the required info. The pre-qualification requirements will vary depending on what lender you choose.

4. Examine Their Portfolio

It's best to find a lender who's worked with plenty of companies like yours in the past. You can gain insight into this information by looking at the lender's portfolio. Reputable firms will proudly showcase the most notable companies they've worked with.

The more businesses like yours they've lent money to, the better. This also means the lender will understand what type of bridge loan is best for your needs. Making a financing decision without professional oversight is never recommended.

 This could be an expensive mistake, as you might deal with unfavorable terms. Avoid businesses that don't have portfolios, as there's no way to gauge what type of experience you'll have.

5. Get a Tailored Proposal

Don't move forward with lenders who won't provide tailored proposals. The lender will assess your situation and calculate a loan amount and terms.

For example, let's assume you run an athletic apparel company that generates $200,000 in revenue each year. You ask a potential lender for a tailored proposal, and they set loan terms based on your company's performance. The primary benefit of doing so is having the lender consider factors they normally wouldn't.

 To clarify, your revenue might seem low at first glance to certain lenders. However, looking at your passionate customer base and refined marketing strategy could alleviate their concerns. Without a tailored proposal, you'd be limited by what they'd normally offer without taking a closer look.

6. Consider Their Fees

One of the most important attributes to consider about your lender is the fees they impose. These typically include servicing fees, miscellaneous expenses, and one-time origination fees.

 Thoroughly read your loan agreement details so you understand the true cost of the loan. Researching industry trends can help you assess whether the loan fees are fair.

It's also a good idea to research information on fee structures to have insight into their key nuances. The last thing you want is to sign an agreement without knowing what to expect.

7. Compare Multiple Proposals

It's crucial to compile a list of the proposals you've received before you make your decision. It's never recommended to go with the first lender who approves your application.

 Some people make the mistake of being impatient during the process to secure financing faster. This could cause you to overlook lenders who offer far more favorable terms.

Pay close attention to the amount of the loan, the fees, and repayment terms. This goes a long way toward getting the best results. You can likely find a suitable option in a list of four or five lenders.

 If you still aren't able to, make a shortlist of a handful of other lenders. You can repeat this process until you find one right for you.

When to Obtain a Bridge Loan

Bridge loans are best during periods of transition. A great example is when a company hasn't yet received inventory or access to a commercial building.

 A bridge loan can help "bridge" the gap between this time and when they start generating their expected income. Without them, scaling or running a company in its infancy becomes far more difficult.

Find the Best Bridge Loan Lenders

It's essential to find the best bridge loan lenders when looking for this type of business financing. It can mean the difference between whether you reach your target metrics or not.

Riverpoint Capital has proudly served our clients for over a decade and helped them stay financially stable while they scale. Our professional team is ready to help connect you with the best financing options for your needs. You'll learn more about the many benefits we provide when you schedule a call with us today.

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