How Bridge Funding Can Help Your Small Business in a Difficult Time
January 1st 2019 at 5:02pm Published by firstdownadmin
Everything can be running smoothly when all of a sudden, an important piece of equipment breaks down or the cash flow turns from a steady stream into a trickle. Your business has hit a bump in the road, and you need to find a way to get through this difficult time before it takes a bigger toll on your finances. Find out how bridge funding can help your small business get past this financial obstacle.
Isn’t this what emergency funds are for?
Businesses should have emergency funds stashed away for short-term problems that require immediate solutions. It’s an essential safeguard to build into your budget so that a small issue doesn’t turn into a major crisis. Ideally, a business should have three months’ to a year’s worth of money put aside in their emergency fund in order to deal with any financial hurdles.
But the ideal emergency fund isn’t an easy achievement for small businesses. Over 40% of Americans can’t cover a $1000 emergency expense, which means they would have to go into debt to solve the problem. When people are living from paycheck to paycheck, they don’t have much money to put in a savings account and keep for a rainy day. Small businesses that are trying to stay afloat have the same struggle. How can they set aside a comfortable emergency fund when they’re already working hard enough to pay for all of the essentials?
When your small business is dealing with a financial shortfall and you don’t have any emergency funds available, you can turn to First Down Funding to get an immediate solution.
What can Bridge Funding do?
A bridge fund is a short-term financial solution designed to get you over a temporary obstacle. Imagine that your business is moving on a steady path toward growth and success. Suddenly, a chasm appears in front of you. The chasm could represent weak cash flow, essential repairs or a looming deadline for a business partner’s payment. Bridge funding helps you cross that gap safely and then return to the path you were on moments before.
Here are some things that businesses can use bridge funding for:
- Pay for emergency repairs
- Honor important payments to business partners or associates
- Help with a lull in cash flow
- Purchase discounted materials
As you can see, bridge funding fills the gap for American businesses that are looking to make it through rough patches so that they can get back to their regular agenda. It’s important to know that this is a low-level type of funding. It’s designed for low-value expenses and short-term scenarios. It’s not intended for long-term funding plans, like hiring more staff. If you need to make long-term changes, you should check out First Down Funding’s options for long-term funding.
It’s difficult applying for any kind of funding at a traditional financial institution. There is always the risk of getting denied. If you get rejected, you’ve wasted your time going through the application process and you still have to find a way to solve your emergency. By skipping the big banks and going to alternative funding options for short-term relief, you can streamline the funding application and get good results.
Another benefit of using this alternative funding option is that you don’t have to make an appointment to speak with an employee at the bank. You can fill in your application online. All you need is a secure internet connection and your business information, and you should be ready to apply.
Going to the bank for some short-term funding is also frustrating because it takes so much time. It could take weeks to get approved for the funding and get access to the money you need. When you’re trying to get over a bump in the road, you don’t want to wait that long. In some cases, you can’t risk the wait at all. If a broken piece of equipment puts your business at a complete standstill, you can’t sit around and wait for the bank to help.
You will want a fast funding time so that you can resolve your financial emergency right after it happens — not weeks down the line. After putting in an application, you can get approved within the same day. And your funding time will be within 24 to 72 hours.
It Eases Financial Stress!
Worrying about not getting the right amount of funding in time can put you in an emotional tailspin. You will be staring at your smartphone, hoping that you’ll get a call that you’re approved for bridge funding. Or, you’ll spend your time fretting about what you’ll have to do to keep your doors open and customers happy.
Financial stress is an incredible burden. A recent survey from DaySmart Software found that 54% of small business owners worry about money so much that it keeps them up at night. You shouldn’t be sitting up in bed calculating the profits you’re bringing in and wondering what costs you can trim just to get by at the end of the month.
Living with chronic financial stress can negatively affect your physical health, leading to higher risks of cardiac problems, type 2 diabetes and stomach ulcers. The stress will also impact your mental well-being, giving you anxiety and/or depression. These physical and mental conditions will influence your ability to work and perpetuate a harmful cycle of worrying about your business’s stability.
If you don’t have wiggle room in your monthly budget, an emergency can pull the rug from under your feet. It could be something as simple as a piece of major equipment breaking down, requiring repairs right away. Or it could be that the cash flow has dramatically slowed, and you need some funds to help you out until the flow returns to normal.
Whatever the reason behind the bump in the road, bridge funding can help. The funding can make sure that your business recovers straightaway, and you get back on the path to success. And it can be a huge relief so that you don’t lose sleep wondering what you’re going to do in the morning.