By Brad MacLiver
Authorship and profile at Google
With the changes in the UT pharmacy industry independent drug store owners, small and regional pharmacy chains, and pharmacy equity investment groups are acquiringUtah
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 Pharmacy Transactions inUtah
1. An independent pharmacy owner inUtah
2. A smallUtah
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a great 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 Utah pharmacy group 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 UT is owned by two or more partners and one of the partners is ready to exit the business, a bridge loan can help ensure the cash flow and uninterrupted operation of the business during the partner buyout.
6. Equipment or real estate bought at auction may have a tight window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. The benefits of a bridge loan permit theUtah
Bridge loans can be an essential financial tool when there are business opportunities, opportunities to buy or sellUtah
Additional tips related to pharmacy bridge loans inUtah
1. Although bridge loans are quick to obtain, they are quick to expire.
2. Bridge loans are similar to hard money loans and the terms are often used interchangeably in conversation. Both loans are short-term, non-standard, high interest rate loans. However, in some circles, hard money refers to the source of lending while a bridge loan refers to the duration of the loan.
3. Because a bridge loan usually comes with higher interest rate than traditionally financing a larger down payment, there is a lower Loan to Value (LTV) and a lower level of risk which provides an opportunity for lower interest rates.
4. With the shorter time period of bridge loans borrowers will need to be aware that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period than traditional financing transactions.
Understand the types of deals that require a bridge loan may be considered speculative in nature, or have higher risk factors. Due to this many banks do not offer bridge loans. Banks must meet government regulations and need to justify their lending practices. Riskier bridge loans do not usually fall within the lending parameters of many banks. Therefore a majority of the bridge loans will come from private investment firms. It is best to consult a company that 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 UT pharmacy industry independent drug store owners, small and regional pharmacy chains, and pharmacy equity investment groups are acquiring
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 Pharmacy Transactions in
1. An independent pharmacy owner in
2. A small
3. A pharmacy owner in a leased location has an opportunity to quickly acquire a commercial property that would be a great 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 Utah pharmacy group 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 UT is owned by two or more partners and one of the partners is ready to exit the business, a bridge loan can help ensure the cash flow and uninterrupted operation of the business during the partner buyout.
6. Equipment or real estate bought at auction may have a tight window for closing the deal and timing of traditional financing would keep the buyer from proceeding with the opportunity. The benefits of a bridge loan permit the
Bridge loans can be an essential financial tool when there are business opportunities, opportunities to buy or sell
Additional tips related to pharmacy bridge loans in
1. Although bridge loans are quick to obtain, they are quick to expire.
2. Bridge loans are similar to hard money loans and the terms are often used interchangeably in conversation. Both loans are short-term, non-standard, high interest rate loans. However, in some circles, hard money refers to the source of lending while a bridge loan refers to the duration of the loan.
3. Because a bridge loan usually comes with higher interest rate than traditionally financing a larger down payment, there is a lower Loan to Value (LTV) and a lower level of risk which provides an opportunity for lower interest rates.
4. With the shorter time period of bridge loans borrowers will need to be aware that fees for valuations, legal, dues diligence, etc., will be amortized over a shorter period than traditional financing transactions.
Understand the types of deals that require a bridge loan may be considered speculative in nature, or have higher risk factors. Due to this many banks do not offer bridge loans. Banks must meet government regulations and need to justify their lending practices. Riskier bridge loans do not usually fall within the lending parameters of many banks. Therefore a majority of the bridge loans will come from private investment firms. It is best to consult a company that has access to a number of funding sources who provide bridge loans.
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