A look at the advantages of bridge loans

In the world of finance and investment, bridge loan comes into mind when a person or a company wants a temporary loan to “bridge the gap” between times when financing is needed. It is a short-term loan that allows users to meet current obligations by providing immediate cash flow.

Viewed as a loan anticipation plan, bridge loans are gaining in popularity these days because of its many benefits compared to other types of loans, such payday loans and advanced fee loans.

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For one’s enlightenment, here are some of its advantages:

Strictly short-term. Borrowers typically opt for bridge loans due to its short term structure. It provides people and companies the funding they need until they are able to obtain long-term financing from capital markets or takeout. Although interest rates tend to be higher, bridge loans are often manageable for most organizations since it is designed to be repaid in full by the time long-term form of financing is secured.

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Flexible repayment options.Depending on the contract, most lenders provide borrowers the opportunity to choose a repayment option that is suitable for their ability to pay on time.

Time saver. Those buying a home but haven’t sold their existing home yet can directly put a home on the market without restrictions, which does not require monthly payments for a few months.

Like any other types of loans, a bridge loan involves high stakes for borrowers and lenders. Those planning to acquire this type of loan must have an understanding of the right timing, structure, terms, and range of outcomes under a bridge loan commitment.

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Tony Hartman, a Denver, Colorado-based finance expert, is the senior managing partner at Mark Private Capital LLC, a company that specializes in bridge financing for business and real estate opportunities. Learn more about him by visiting this Google+ page .

Looking for the next big thing: Tips for investing in tech startups

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 What do Facebook, GoPro, and Dropbox have in common? Apart from being recognizable names in their respective domains, all three companies started as small tech startups. Investing in the next big thing in tech is very risky, but the rewards are an irresistible allure especially for new investors: five to 100 times the initial investment.

First-time investors ready to dip their toes into the often-muddy waters of tech startups might find these tips useful:

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1. Evaluating the risks. Startups returns could be huge if they succeed, but if they don’t, investors might not even get their initial investment back. Investors should evaluate their risk tolerance, financial capacity, and their investment style before committing to investing in a tech startup. For example, a conservative investor with limited capital should steer clear of this type of asset.

2. Sticking to the familiar. New investors in tech startups might want to consider choosing a company in an industry they’ve worked in. Being familiar with a startup's industry will enable an investor to see past the hype and make an informed judgment based on experience and operational knowledge. Those who still want to invest in a tech startup that’s outside their realm of experience should find co-investors with the experience and knowledge needed to assess.

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Another way to minimize risk when investing in tech startups is by investing in more than one. Studies suggest that 10 to 20 holdings are enough to statistically decrease the risk of loss.

Tony Hartman, a Denver, Colorado-based business coach, is a respected authority on real estate investment and collateral-backed lending. For more discussions on early-stage startup investing, visit this blog.