By Brad MacLiver
Authorship and profile at Google
With the changes in the Vermont (VT) pharmacy industry independent drug store owners, small and regional pharmacy chains, andVermont
Bridge Loans are a short-term financing option and are used while waiting for permanent financing, or the next stage of financing to be obtained. Bridge loans provide funding to "bridge" the gap between a company’s current needs and their long term financing 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 Vermont Pharmacy Transactions:
1. An independent VT 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 needs $1 million to expand their business. They have 3 new equity investors who will be investing in the firm over the next 6 months, but at different intervals. However, the business has opportunities which require action sooner than 6 months. The quick closing bridge loan allows the pharmacy chain in VT access to the needed funds so they can complete their expansion and increase profits. Money from the 3 new equity investors will pay off the bridge loan.
3. AVermont
4. A pharmacy group in Vermont developing new 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 pharmacy inVermont
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 theVermont
When there are business opportunities, buying 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 pharmacy bridge loans in VT:
1. Bridge loans are quick to obtain but they expire quickly.
2. Bridge loans are similar hard money loans and the terms are often used interchangeably during conversation. Both loans are short-term, higher interest rate, and non-standard loans, but hard money can refer to the lending source in some circles, while a bridge loan refers to the duration of the loan.
3. Because a bridge loan will usually come with a higher interest rate rather than traditional financing with a larger down payment. This results in 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 will need to keep in mind that fees for valuations, legal, dues diligence, etc., will be amortized over a smaller period of time than traditional financing transactions.
Take note that the types of deals which require bridge loans may be considered speculative in nature or have higher risk factors. Because of this, banks will often refuse to offer bridge loans. Banks must also meet government regulations, so they need to justify their lending practices. Bridge loans, which are riskier, do not usually fall within the lending parameters of many banks. A majority of the bridge loans must therefore come from private investment firms. It is best to talk with a company that has access to several funding sources who can provide bridge loans.
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Authorship and profile at Google
With the changes in the Vermont (VT) pharmacy industry independent drug store owners, small and regional pharmacy chains, and
Bridge Loans are a short-term financing option and are used while waiting for permanent financing, or the next stage of financing to be obtained. Bridge loans provide funding to "bridge" the gap between a company’s current needs and their long term financing 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 Vermont Pharmacy Transactions:
1. An independent VT 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 needs $1 million to expand their business. They have 3 new equity investors who will be investing in the firm over the next 6 months, but at different intervals. However, the business has opportunities which require action sooner than 6 months. The quick closing bridge loan allows the pharmacy chain in VT access to the needed funds so they can complete their expansion and increase profits. Money from the 3 new equity investors will pay off the bridge loan.
3. A
4. A pharmacy group in Vermont developing new 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 pharmacy in
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
When there are business opportunities, buying 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 pharmacy bridge loans in VT:
1. Bridge loans are quick to obtain but they expire quickly.
2. Bridge loans are similar hard money loans and the terms are often used interchangeably during conversation. Both loans are short-term, higher interest rate, and non-standard loans, but hard money can refer to the lending source in some circles, while a bridge loan refers to the duration of the loan.
3. Because a bridge loan will usually come with a higher interest rate rather than traditional financing with a larger down payment. This results in 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 will need to keep in mind that fees for valuations, legal, dues diligence, etc., will be amortized over a smaller period of time than traditional financing transactions.
Take note that the types of deals which require bridge loans may be considered speculative in nature or have higher risk factors. Because of this, banks will often refuse to offer bridge loans. Banks must also meet government regulations, so they need to justify their lending practices. Bridge loans, which are riskier, do not usually fall within the lending parameters of many banks. A majority of the bridge loans must therefore come from private investment firms. It is best to talk with a company that has access to several funding sources who can provide bridge loans.
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