A few months ago, PrestaFlex financed a bridge loan for a trading company specialized in the plastic materials and located in Eastern Switzerland
What was the goal? The company was planning to expand and gain ground. A considerable amount of liquidity was therefore required.
What financing difficulties did the plastic trading company encounter?
The structure of the company’s financial statements did not allow an external financing. To guarantee the financing of a bridge loan, we advised them to increase their share capital in order to obtain a strong balance sheet and a much larger equity share.
The bridge loan, the ideal solution for the plastic trading company
A bridge loan is a way to seize an opportunity in the market that cannot wait, despite the lack of liquidity that a company may have. In the case of the plastic trading company, we talk about an opportunity for growth. Through a bridge loan, PrestaFlex provided the immediate liquidity required to realize the growth project.
This type of financing can also be used for other types of projects, very often in the real estate industry.
PrestaFlex was able to finance an additional amount of CHF 200’000 to the initial request of the plastic trading company
Initially, the plastic trading company made a request for CHF 450’000. Following the balance sheet restructuring advised by PrestaFlex, we were able to finance a bridge loan of CHF 650,000. The plastic trading company was then able to obtain an additional liquidity of CHF 200,000 for the implementation of the growth project.
The financing conditions of the bridge loan are as follows…
- Objective = to generate maximum cash flow to continue funding the working capital
- A 36-month bridge loan
- A flexible repayment period which is characterized by monthly repayments (constant annuities)
- No penalty for early repayment, can be repaid at any time
- Amortization and interest included in the monthly payment
More information under : The bridge loan, the business loan for a market opportunity
Written by : Gabriel Oberson, financial assistant at PrestaFlex & Arij Kamel, marketing trainee at PrestaFlex, Fribourg