Sometimes, you need extra funding to run a successful company. That said, every business is different, and what works best for yours depends on the size and maturity of the loan and the type of business. Our services include a number of ways to support your activities or achieve your goals.
Different loan options for business clients
Many companies own real estate, whether it be agricultural or forest land, commercial premises, warehouses, production facilities, or even residential buildings. Real estate is often seen primarily as a fixed asset, with a value that seems to stand still. In fact, real estate can actively support a company through a mortgage loan.
Real estate pledged as collateral provides more secure grounds for a loan, which in turn allows you to obtain a loan on better terms than with unsecured financing. This works especially well for companies that have assets but need some temporary financial support or are about to make a big investment. Nordic Hypo offers bridge financing, mortgage loans, and credit lines to business clients. Let’s take a closer look at these services.
What is bridge financing and how does it work?
Bridge financing is a short-term financial solution intended to kick-start projects or provide interim financing. As the name suggests, it acts as a bridge, providing a solid foundation or springboard in situations where cash flows come later or financing solutions are not finalised.
In business, bridge financing is often used in cases where the company has plans to sell real estate, take out a long-term loan, or bring in an investor, but hasn’t yet finalised the process.
This solution fits situations where time is of the essence. It also helps to take important steps that would otherwise prove difficult, such as when you need capital to buy a new property before selling your old one. Bridge financing lets you take action right away, instead of waiting for all your previous deals to close.
Bridge financing helps your company expand by letting you keep focusing on your primary business activities without having to divert too many resources to the new project.
Bridge financing is more intended for activities planned in the near future. You can take out a loan for a minimum of 2 months and a maximum of 3 years. The possible loan amounts range from €25,000 to €1,000,000.
Business mortgage loans
A mortgage loan is the most traditional way to take out a loan with real estate as collateral. A mortgage is placed on the company’s real estate, giving the company access to a long-term loan, usually with a favourable interest rate and a longer repayment period. It’s a flexible loan with real estate as collateral. It works best for investments, expansion, or refinancing existing obligations. It can also be used to buy or improve real estate.
Mortgage loans are extremely flexible – the loan period ranges from 2 months to 10 years, and the loan amount is between €15,000 and €2,000,000.
Credit line for business clients
A credit line against real estate collateral is a more flexible solution for securing fast cash for your business. With a credit line, companies can use the loan funds as needed, instead of taking out a one-time loan that is paid out immediately. Interest is charged only on the amount used, making it a convenient solution for companies that need extra resources only occasionally – for example, if their business is seasonal or their expenses and income are not linear.
You can take out a credit line for up to two years, with the loan amount ranging from €25,000 to €2,000,000.
When should you use which solution?
If your business is under time pressure, for example, because you’re waiting for proceeds from the sale of real estate or funds from investors, but you need to make payments or investments before that happens, bridge financing can be a sensible solution. Real estate helps save time and keep your business running.
A mortgage loan is a good option for entrepreneurs with stable business operations and long-term investment plans. A mortgage loan provides a solid foundation for lower interest rates and a predictable schedule.
If your cash flow fluctuates and your business needs flexibility to create stability, go for a credit line. This is helpful in situations where you don’t know exactly when and how much money you might need, but want to be ready to act.
Real estate can help your company grow, adapt, and take advantage of opportunities that would otherwise remain out of reach. A loan against real estate collateral serves as a cornerstone for achieving greater goals and strong results.
If you want to secure the future of your company or spur its growth, check out Nordic Hypo’s services for business clients and contact us. Applying is quick and easy, and you can do so either at your nearest Nordic Hypo office or online.