A bridge loan is a type of short-term loan which is useful until a particular company or person receives permanent funding or eliminates the obligations that already exist. It provides an instant flow of cash to the users for fulfilling their current obligation. They provide it for a shorter time up to 1 year with a high rate of interest and backed up using collaterals like inventories or real estate. The temporary bridging loan provides working capital at a low cost to the business during the most demanding and emergency period. It acts as an initiative between the government to help the business and SME’s in their country. It applies to the business registered in the country operating with a permanent share hold of at least 30%. The rate of interest differs for each participant based on the risk assessment and type of business.
The eligibility criteria for temporary bridging loans are as follows,
- The business entity must be physically present and registered in the nation.
- It must hold a minimum of 30% of direct or indirect shareholdings by the PR
You can also get more information about the benefits and its application process of this loan from the best expert managers provided in the banks. They also provide online facilities to enquire and clarify the doubts and queries of the user. This loan is not applicable for the companies that make do not make a profit for over 2 years. The companies with a low score of credit and a business that does not exist in the market are not eligible for applying for this loan.
Required documents for applying for Loan
- The applicant should provide the certified financial statements or audited accounts for the last 2 years.
- They must provide bank statements for the last 2 years.
- The applicant must provide the front and back copies of the NRIC of any one people like sole proprietors, owners, guarantors, partners, or directors.
- They must provide the latest assessment notice of the personal Income Tax of these persons like partners, directors, sole proprietors, guarantors, or owners.
Applying for this loan is easy, quick, and requires some document copies of the guarantors. You can repay the loan, and it recalculates the rate of interest during the date of payment. This means that the owners of businesses looking for funding in projects can repay the loan once they complete the project. They can use it as the working capital for the business. The processing fee for this type of loan is low comparing other types. The approval and cash flow are fast in this loan process. It provides attractive values of rate of interest to make cash flow management easier. It gives 5 years the time to repay the flexible loan amount. It does not require any security for getting the loan. You can also apply and get the approval online. It provides a low rate of interest from 1.5% per annum. You can apply for the same loan multiple times with different financial institutions. The processing time differs based on the financial institutions and banks depending on the process of assessment and requirements of the loan.