Interim financing for companies: bridging loan for rapid liquidity

The most important things in brief

• Interim financing is a short term loan, which bridges liquidity bottlenecks until long-term loans or expected income are available.
• Since interim financing only serves to bridge the gap, the term is usually short and is typically between a few weeks and a maximum of two years.
• The interest rates for interim financing are often 1—5 percentage points above that of long-term financing, as the period for repayment is narrowly limited and they are usually riskier for lenders.

Definition: What is interim financing?

Interim financing is a type of bridging financing and is therefore called a transitional loan or bridging loan in addition to an interim loan. you Is short-term financingwhich companies use to close liquidity gaps until promised financing or expected income is available. This short-term interim financing is used, among other things, when long-term financing has already been secured but has not yet been paid out. With short terms of weeks to a maximum of two years, it offers companies the necessary flexibility to bridge financial bottlenecks and move projects forward without delay. Since interim financing has the character of a final loan, the Repayment usually at the end of the term‍

‍Examples: Interim financing in companies

• Interim financing for a growing start-up: A tech start-up has successfully completed a financing round, but the promised funds will only be paid out in three months. In order not to slow down the strong growth, new developers must be hired and marketing measures brought forward. With the help of interim financing, the start-up can make these investments immediately and close the financing gap until the capital from the financing round is available.
• Interim financing for a major project: A mechanical engineering company has received a major contract for which it has to procure materials and components. However, payment by the customer is made only after the project is completed. In order to be able to start production immediately, the company uses interim financing. In this way, it can finance the required resources and implement the project on time until the customer payment is received.

Alternatives to interim financing

‍If your company needs liquidity in the short term but does not want to take advantage of interim financing, there are various Alternatives to avoid payment bottlenecks. The following solutions represent emergency measures that can quickly help with liquidity problems:

• Current account credit: The short-term overdraft of the business account to cover current payment obligations such as rent, wages or invoices. Although this solution is fast and flexible, it should be well planned due to the usually high interest rates.
• Factoring: The sale of outstanding receivables to a service provider in order to obtain immediate liquidity. This is particularly useful if customers have long payment periods and you need funds at short notice to meet liabilities. factoring It also reduces the risk of payment defaults.
• Sale-and-lease-back: The sale of an asset — such as a machine or a vehicle — in order to rent it back. This allows you to free up capital without sacrificing important resources.
• Vendor credit: The option to purchase goods or services on account and only pay after an agreed period of time. This solution is often interest-free, but may result in additional costs due to cash discounts or late payments.

Tip: Monitor your liquidity in real time, with a Liquidity management tool, like Tidely. In this way, you can identify bottlenecks early on and take targeted countermeasures. The earlier you plan financing, the more reputable your company looks — this improves your chances of getting a loan and can have a positive impact on the conditions.

“With Tidely, we've reduced our weekly time spent managing finances from four to five hours to just one hour. The financial clarity I have gained has enabled me to make well-founded decisions and sleep peacefully. Tidely helped us plan to scale and significantly strengthen our bank's confidence. Thanks to the clear overview, we were able to avoid negative surprises and handle incoming invoices without stress. ” Dennis Balzer, CEO of BETTER BE BOLD

The difference between pre-financing and interim financing

Pre-financing and interim financing are both types of bridging financing. They differ significantly in the purpose and security of the means of repayment. Pre-financing covers costs before income or final financing is contractually secured. It therefore entails a higher risk, as the timing and availability of repayment methods remain open. Interim financing, on the other hand, bridges liquidity gaps when the final financing has already been determined but is not yet available. The repayment date is clearly defined here.

When does interim financing make sense? Typical situations for companies

Interim financing is particularly necessary for companies if short-term liquidity bottlenecks arise and financial capacity to act is to be maintained. We have summarized some typical application scenarios here:

• Payment gaps due to late invoices: Outstanding claims that are not paid on time by customers can liquidity strain. Interim financing provides a remedy here by providing the required liquidity in the short term.
• Advance payments for projects: Companies often have to make advance payments, e.g. for material purchases or services. A bridging loan can finance this phase until customers make the previously promised payments.
• Bridging funding payments: If a company waits for approved funding but is disbursed with a delay, interim financing can provide the necessary funds to implement projects on schedule.
• Seasonal variations: In industries such as retail, interim financing can help to fill liquidity gaps and keep business operations stable during periods of low turnover.
• Bridging the gap to long-term financing: Companies negotiating a long-term loan can use an interim loan to temporarily secure the necessary funds until the final financing is paid out.
• Financing through asset sales: If capital from the sale of assets such as machinery or real estate is not available in good time, interim financing can cover the period until the sales proceeds are received.
• Increasing existing financing: If it turns out that an ongoing project is becoming more expensive than planned, a bridging loan can serve as a supplement to cover the additional capital requirements.

Liquidity bottlenecks are among the most common causes of corporate insolvencies, which could be avoided through forward-looking planning. This issue is red-hot, as in 2024, the number of corporate bankruptcies reached the Federal Statistical Office a record figure and increased compared to the previous year by 16.8% — the highest level since 2015. Experts expect this trend to continue in 2025 and could reach levels similar to those after the financial crisis of 2009!

To avoid liquidity bottlenecks, a real-time overview of your finances is crucial. With Tidely, you get exactly that: transparency and control. Reserve an appointment now for a short meeting with our product experts. Within 10 to 20 minutes, we will analyse your requirements and answer your questions. After that, you can Try Tidely free of charge and without obligation for 7 days. Make an appointment now!

‍What does interim financing cost for companies?

The costs of interim financing vary depending on the individual situation and depend on several factors. The key influencing factors include:

• Loan amount and term: The higher the financing amount and the longer the term of the interim financing, the more interest is accrued. At the same time, longer terms also increase overall costs due to additional interest payments.
• Credit rating: Companies with good credit ratings generally benefit from more favourable conditions for interim financing, as the risk for the lender is lower. A poorer credit rating, on the other hand, can lead to higher interest rates and potential risk premiums.
• Drafting of the contract: Flexible terms and variable interest rates offer adjustment options, but can result in higher costs. Fixed-interest agreements, on the other hand, usually make financing easier to plan.
• Protection: If reliable evidence of the imminent availability of capital is available — for example through approved funding, promised long-term financing or expected incoming payments from customer orders — risk premiums can be reduced and conditions significantly improved.

Since the terms of interim financing are comparatively short, interest rates are often low 1 to 5 percentage points above long-term financing. This reflects the increased risk for the lender, as the period for repayment is narrowly limited. In addition, there may be processing fees, costs for account checks, and administrative expenses, which should be taken into account when calculating the total cost. Depending on the lender, another advantage of interim financing can be Possibility of early repayment be. This means that if the expected capital becomes available earlier, companies can replace the financing and thus significantly reduce the total costs.H2: How does interim financing work — step by step? Interim financing can usually be applied for quickly and easily in order to close liquidity gaps quickly and efficiently. Applying for interim financing is carried out in five steps:

1. Determine requirements: First, determine how much capital is needed and how long the funding gap is likely to last. Analyze exactly which costs need to be covered and when the repayment can realistically be made.
2. Choose a financing solution: Compare providers and choose interim financing with the best conditions. Pay attention to interest rates, duration and flexibility. Providers can be banks, credit institutions or specialized financial service providers.
3. Verification by the lender: The lender assesses your credit rating, risk and collateral. This could be, for example, outstanding income, approved funding or planned cash inflows.
4. Credit approval and disbursement: Following a positive evaluation, funding will be provided. Your company receives the required amount to make investments, advance payments, or other financial obligations.
5. Plan repayment: Develop a strategy to pay off the loan, including interest payments. The repayment is often final — this means that the entire loan amount, including interest, is paid in one fell swoop at the end of the term. The funds for this usually come from expected income or long-term financing.

Tidely offers its customers exclusive conditions for interim financing in cooperation with Banxware as a lender. With this instant financing, you can Have €250,000 available tomorrow! As a Tidly customer, you not only benefit from good interim financing conditions. The liquidity management tool gives you full transparency about your company's finances and strengthens the trust of your banks — an important factor for better financing conditions. In addition, with Tidely, you can create a comprehensive cash flow report with a single click that meets all requirements for financing inquiries.Try Tidely now for free and request your test account: Request a test account now!

‍Advantages and disadvantages of interim financing

Interim financing offers an effective solution to short-term liquidity problems with a high degree of flexibility and ease of use. However, it involves higher costs and specific risks, which require precise planning and a clear repayment strategy. The advantages and disadvantages at a glance:

Benefits

Quick liquidity: Capital is made available in the short term to bridge financial bottlenecks quickly and efficiently.

Easy processing: Applying for and providing funding is significantly easier and faster than with long-term financing.

Adherence to project plans: Interim financing makes it possible to move important projects forward without delay, even if the planned capital is not yet available.

High flexibility: Can be used for a wide range of projects, such as bridging or seasonal fluctuations.

Easy repayment: The repayment is due or early, as soon as the expected capital is available.

Drawbacks

Higher interest costs: Interest rates are often 1 to 5 percentage points above those of long-term financing, which increases overall costs.

Limited runtimes: The short term requires precise planning and quick repayment, which can create entrepreneurial pressure.

Limited range of use: Interim financing is only suitable for short-term purposes (max. 2 years) and is only intended to bridge the gap.

Dependence on expected funds: Delays or failures in long-term financing or planned income can cause significant repayment problems.

Planning risk: Inaccurate calculations or unforeseen changes can cause financial bottlenecks or an excessive burden on liquidity.

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Avoiding liquidity bottlenecks and planning interim financing — it's that easy with Tidely

With Tidely, you get a comprehensive solution for your Liquidity management, which not only helps you avoid short-term liquidity bottlenecks, but also your To make companies stable in the long term and to scale. With Tidely, you can easily connect all your bank accounts and accounting systems. Within just 30 minutes, you will receive initial insights and a real-time, up-to-date overview of your financial situation — automatically and without the hassle of manual Excel lists or time-consuming copy-paste work.

Thanks to the new AI forecasts and scenario analyses You can predict precisely when capital is needed and plan specifically what will happen if financing arrives later. With the integrated tools for cost optimization and analysis, you always have control over your most important financial KPIs and can easily generate reports in PDF or Excel format.

Especially for companies that Would like to take advantage of interim financing, Tidely provides valuable support. The software shows when and how much capital is required and enables efficient repayment planning. Automation creates transparency and strengthens the trust of your banks — a decisive advantage for better financing conditions. You can download the required documents, such as a detailed cash flow forecast, in Tidely with just one click.

“Thanks to Tidely, we were able to easily manage the financing for our 'Höhle der Löwen' performance. The precise liquidity planning helped us to pre-finance our inventory and successfully manage the onslaught. With precise cash flow forecasts and scenarios, we were able to convince our bank advisor, which led to the problem-free doubling of our credit line. As a result, we were well prepared and were able to continue to grow safely. ” Dennis Balzer, CEO of BETTER BE BOLD

‍About 1000 companies from various industries They already rely on Tidely. In addition to the software, Tidely offers a individual onboarding process and German-language supportso that you can get the most out of your liquidity management. Try Tidely now for 7 days free of charge and benefit from simpler, more transparent and more efficient financial management!

Request a test account now!

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FAQ‍

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What is interim financing for companies?

‍Interim financing is a short-term loan that helps companies to bridge financial bottlenecksuntil long-term funds, such as promised loans or expected income, are available. It offers quick liquidity for investments, to finance projects, to bridge seasonal fluctuations or up to long-term financing. The repayment is usually final, often with higher interest rates than with long-term financing.‍

How long does interim financing take?

‍Intermediate loans typically have terms of a few weeks up to a maximum of two years. They are specifically designed to meet short-term liquidity needs until long-term financing or expected income is available. The term is agreed flexibly and is based on when the required capital is available for repayment.‍

Interim financing — how does it work?

‍Interim financing is carried out in several steps:

1. First, your financial Demand determined — i.e. how much capital you need and for what period of time.
2. You then select the suitable financing solution and submit the necessary documents.
3. After Check your credit rating and securities are paid out.
4. Die repayment It is usually due to expire or as soon as long-term capital is available.

What are the current interest rates on interim financing?

‍Interim financing has higher interest rates than long-term loans — usually 1 to 5 percentage points more. The exact costs depend on your credit rating, duration and risk. Companies with good credit ratings benefit from more favourable conditions, while a lack of collateral can cause risk premiums. While flexible interest rates offer adjustment options, they are often more expensive. Comparing offers is crucial to optimize your costs.‍

What can I use interim financing for?

‍You can do interim financing for various purposes use, e.g. to finance orders, to bridge liquidity bottlenecks or to cover seasonal fluctuations until a promised long-term financing comes into force. It is also suitable for securing important investments while you have to wait for long-term financing or expected income. In this way, your company remains flexible and able to act.‍

What requirements should my company meet for interim financing from Tidely?

‍We offer our customers exclusive conditions in cooperation with Banxware as a lender. For instant financing from Tidely, your company should be registered in Germany exist for at least six months and achieve monthly sales of at least €1,250. The application is digital and quick, giving your company access to short-term liquidity of 250,000€ within one day receives.‍

How much can interim financing be?

‍The amount of interim financing depends on the provider and individual requirements. In cooperation with Banxware, as a Tidly customer, you can Apply for up to 250,000€. The exact amount depends on the company's turnover, credit rating and requirements. The amount is flexibly adjusted to financial requirements.