By Brad MacLiver
Authorship and profile at Google
With the changes in the MD pharmacy industry independent drug store owners, small and regional pharmacy chains, andMaryland
Bridge Loans are an option for short-term financing which can be used while waiting for permanent financing, or used while the next stage of financing to be obtained. Bridge loans provide funding that "bridges" the gap between a company’s current financial needs and their long term requirements. Permanent financing is generally used to "take out," or pay back, the bridge loan.
One of the characteristics of a bridge loan is that they can close quickly, which in turn allows a company to capitalize on a timely business opportunity, or acquisition. The quick access to money can also allow a business the chance to avoid penalties, bankruptcy, or other temporary problems. If longer term issues need to be dealt with, this “transitional financing” provides the company time until longer term financing can be secured.
Another characteristic of bridge loans is that the process usually requires less documentation than conventional financing. Bridge loan lenders don’t usually have the same government regulations to adhere to, so they tend to have more flexibility in their lending criteria and the documentation they require. However, less documentation does not mean they won’t perform due diligence to have a comfort level with the transaction before they fund.
Examples of using Bridge Loans in Pharmacy Transactions inMaryland
1. An independent MD pharmacy owner learns of health issues and decides to quickly sell the family owned pharmacy to an employee or local competitor. Traditional financing for the pharmacy buyer may require a time line that is not acceptable when considering the circumstances. A bridge loan can be used to quickly accomplish the transaction.
2. A small pharmacy chain inMaryland
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a great MD pharmacy location, but the property is in disrepair. A bridge loan provides the needed funds to acquire and rehab of the property and once that is complete conventional long term financing can be obtained.
4. A pharmacy group developing new Maryland pharmacy locations can receive bridge loan funding to get through the permitting process of a project when conventional financing isn’t available at this early stage due to there is still too much risk. A bridge loan allows the project to move into the construction phase and then qualify for other forms of financing.
5. When aMaryland
6. Real estate, or equipment bought at auction may have a narrow window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. Benefits of a bridge loan will permit the pharmacy owner inMaryland
When there are business opportunities, buying MD pharmacies, selling pharmacies, quick deadlines, an old loan maturing before a new loan can be put in place, funding needs during the permit, planning, or evaluating stages, etc., bridge loans can be an essential financial tool.
Tips regardingMaryland
1. Bridge loans are quick to obtain, but quick to expire.
2. A bridge loan is similar to a hard money loan and the terms are often used interchangeably in conversations. Both are short-term, higher interest rate, non-standard loans, but in some circles hard money refers to the lending source and a bridge loan refers to the duration of the loan.
3. Because bridge loans usually come with higher interest rates than traditional financing a larger down payment, meaning a lower Loan to Value (LTV) and a lower level of risk and provides an opportunity for lower interest rates.
4. Due to the shorter time period of bridge loans, borrowers should keep in mind that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period of time when compared to traditional financing transactions.
Take note that the types of deals that require a bridge loan may be considered speculative or high-risk in nature. This in turns means that many banks do not offer bridge loans. Banks are required to meet government regulations as well as justify their lending practices. Bridge loans, which are riskier, usually do not fall within the lending parameters of many banks, so a majority of the bridge loans will originate from private investment firms. It is best to consult with a company who has access to a number of funding sources who provide bridge loans.
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Authorship and profile at Google
With the changes in the MD pharmacy industry independent drug store owners, small and regional pharmacy chains, and
Bridge Loans are an option for short-term financing which can be used while waiting for permanent financing, or used while the next stage of financing to be obtained. Bridge loans provide funding that "bridges" the gap between a company’s current financial needs and their long term requirements. Permanent financing is generally used to "take out," or pay back, the bridge loan.
One of the characteristics of a bridge loan is that they can close quickly, which in turn allows a company to capitalize on a timely business opportunity, or acquisition. The quick access to money can also allow a business the chance to avoid penalties, bankruptcy, or other temporary problems. If longer term issues need to be dealt with, this “transitional financing” provides the company time until longer term financing can be secured.
Another characteristic of bridge loans is that the process usually requires less documentation than conventional financing. Bridge loan lenders don’t usually have the same government regulations to adhere to, so they tend to have more flexibility in their lending criteria and the documentation they require. However, less documentation does not mean they won’t perform due diligence to have a comfort level with the transaction before they fund.
Examples of using Bridge Loans in Pharmacy Transactions in
1. An independent MD pharmacy owner learns of health issues and decides to quickly sell the family owned pharmacy to an employee or local competitor. Traditional financing for the pharmacy buyer may require a time line that is not acceptable when considering the circumstances. A bridge loan can be used to quickly accomplish the transaction.
2. A small pharmacy chain in
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a great MD pharmacy location, but the property is in disrepair. A bridge loan provides the needed funds to acquire and rehab of the property and once that is complete conventional long term financing can be obtained.
4. A pharmacy group developing new Maryland pharmacy locations can receive bridge loan funding to get through the permitting process of a project when conventional financing isn’t available at this early stage due to there is still too much risk. A bridge loan allows the project to move into the construction phase and then qualify for other forms of financing.
5. When a
6. Real estate, or equipment bought at auction may have a narrow window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. Benefits of a bridge loan will permit the pharmacy owner in
When there are business opportunities, buying MD pharmacies, selling pharmacies, quick deadlines, an old loan maturing before a new loan can be put in place, funding needs during the permit, planning, or evaluating stages, etc., bridge loans can be an essential financial tool.
Tips regarding
1. Bridge loans are quick to obtain, but quick to expire.
2. A bridge loan is similar to a hard money loan and the terms are often used interchangeably in conversations. Both are short-term, higher interest rate, non-standard loans, but in some circles hard money refers to the lending source and a bridge loan refers to the duration of the loan.
3. Because bridge loans usually come with higher interest rates than traditional financing a larger down payment, meaning a lower Loan to Value (LTV) and a lower level of risk and provides an opportunity for lower interest rates.
4. Due to the shorter time period of bridge loans, borrowers should keep in mind that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period of time when compared to traditional financing transactions.
Take note that the types of deals that require a bridge loan may be considered speculative or high-risk in nature. This in turns means that many banks do not offer bridge loans. Banks are required to meet government regulations as well as justify their lending practices. Bridge loans, which are riskier, usually do not fall within the lending parameters of many banks, so a majority of the bridge loans will originate from private investment firms. It is best to consult with a company who has access to a number of funding sources who provide bridge loans.
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