Bridge Loans and the Online Cash Advance

by GuestPoster on November 15, 2011

When it is difficult for a business or individual consumer to make ends meet with their current cash balance, they may need to apply for a temporary loan or line of credit from a lender in their area. This often occurs in corporate finance, when a large business is in between large transactions, namely in the purchase and acquisition of other business entities, real estate holdings, or corporate mergers between two or more businesses. In personal finance, individual consumers may be short on their usual supply of cash in the wake of a family emergency, or just as they are starting at a new job but have not yet been paid. Before the business owner or individual consumer finds themselves unable to make their usual purchases or payments during this time of financial shortage, they should apply for a bridge loan or an online cash advance.

For the individual consumer, the online cash advance is a great way for the consumer to continue to make their usual payments and purchases during times of cash shortage. These loans are generally only offered over a short period of time, with the assumption that the consumer will pay back the entire loan amount within a few weeks, or at most, within one month after the loan is issued. The online cash advance is often called a payday loan, because the purpose of these temporary loans is to cover a short period of time where the consumer is unexpectedly short on funds. This most often occurs in the United States when a consumer makes a big lifestyle change, such as the starting of a new job, purchasing and moving into a new property, or even welcoming a newborn child into the family.

All of these normal events come with a great increase in costs, payments, and fees that can be difficult for the consumer to handle on their own. For business owners in the world of corporate finance, a bridge loan works in a very similar manner. With the bridge loan, the business owner can maintain the level of cash funds that they have on hand while they are in between making large withdrawals or deposits. For instance, if the business owner is planning on selling off a piece of property or a subsidiary section of their business, but has not yet received the funds for the transaction, they may need to apply for a bridge loan. The bridge loan will cover the business owner’s expenses as they make another purchase with the funds that they intend on receiving from their large-scale transaction, such as purchasing a new piece of real estate to replace the sold property.

Once the business owner has word that they will be obtaining payment for the sale within a certain time frame, they can obtain the bridge loan financing, make their necessary purchases, then pay back the line of credit once they receive the cash from the sale itself. With both the bridge loan and the online cash advance, the borrower will be under serious penalty if they were to make repayment past the due date specified under the loan contract. However, if the business owner or individual consumer wishes to maintain their current credit rating and level of liquidity, they will need to apply for these loans at times of financial need. For the individual consumer, the online cash advance will help maintain their credit rating, as they will be able to remain current on their other lines of credit with this short-term loan. The business owner, on the other hand, is most concerned about maintain the necessary level of liquidity during their business dealings.

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