More firms 'seeking bridging loans'

News Article - Tuesday, May 13, 2008

filed under: Business

A growing number of businesses in Britain are turning to bridging loans to overcome cash flow problems, an expert claims.

The managing director of Bridging Finance suggests that companies are increasingly using bridging loans "to refinance their existing banking facilities or overcome glitches with their cash flow".

According to Chris Baguley, fewer developers are looking to finance large deals and are concentrating instead on smaller, lower-risk agreements that are now "being completed in greater numbers".

"I think that the various applications of bridging finance are shifting slightly in prominence," he explained.

"As suggested above, fewer developers are looking to finance large deals, but we are seeing more businesses using bridging finance for purposes such as refinancing their existing banking facilities or overcoming glitches with their cash flow."

Figures from Datamonitor indicate that bridging loans accounted for £1.2 billion in balances outstanding and £2.5 billion in gross advances during November 2006. The analyst predicts that gross advances will reach £5.6 billion by 2010.

Companies concerned about their cash flow can adopt accounting software to provide them with accurate financial and management reports.

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