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Bridge Financing

Expert: Janet Vandenheuvel

Cath asked:

On June 7, our hotel burned down. There is a small window for building in the North. Could we get a grant to help start while the insurance is being sorted out?

Janet Vandenheuvel answered:

You can apply for "bridge financing" for the interim months between now and the insurance money. This is not unusual---it's an uncomplicated process that can be done pretty quickly with any bank. In its simplest form, you borrow money from the bank while paying interest until the insurance money comes.

Although usually a hassle-free process, the bank will be duly diligent with a normal credit check of you personally, as well as your business. You will also have to provide a "security document" from the insurance company, stating when you will be receiving the insurance claim. Since your bank is already familiar with you, stay with your bank to save time.

About the author

Janet Vandenheuvel is the director of Mainstreet Banking with TD Bank.

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