Commercial Bridging Loan

A "Commercial Bridging Loan" is fast, short-term business finance secured against commercial property.

Commercial bridging loans are suitable for businesses buying and refinancing a commercial property or providing you with short-term finance to bridge your business needs.

When you're looking to use a commercial bridging loan to finance buying a buy-to-let (BTL) property or business premises, fund site acquisition pre-development or at any stage of property development, or cash out equity to access working capital, we'll help you get the best rate bridging loan for your business on the right terms. No borrowing scenario is too challenging or company structure too complex - we're ready to help.

Our commercial bridging loans are available to all legally incorporated entities and company structures, including businesses, developers, investors, speculators, and individuals. They range from £26k to £250m, have a 1-36-month term and can be accessed in as little as 3 working days.

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Our Commercial Bridging Loan service

  • Market-leading commercial property bridging loans from £26,000 to £250m
  • Monthly interest rates from 0.75% pm
    (Lower rates for £700,000+ loans or less than 50% LTV)
  • LTVs up to 65% on commercial property
  • LTVs up to 80% on residential property
  • (up to 100% finance if additional collateral is available)
  • Priority & automated valuation options plus dual legal representation
  • No monthly payments with interest rolled-up options
  • Terms up to 36 months

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Commercial Bridging Loan Sign


Commercial bridging loans are available on property in England, Scotland, Wales, Northern Ireland & Europe.

We provide a fast, reliable service to help you get the commercial bridging finance you need at the best available rates. We consider all types of credit history, including non-status, bad or adverse and don't perform automated credit checks, so there's no footprint from enquiring.

With incredible relationships with the UK's top lenders, including specialist lenders, family offices and private investors, we can source the commercial bridging finance you require:

up to £300k loans in 3 days
up to £750k loans in 7 days 
up to £250m from 14 days

Where your timeline is critical and short, we're confident we can arrange your bridging loan. Get your best, no-obligation quote today.

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Commercial Bridging Loan Financing Riverside New Build Buy To Let Properties


Commercial Bridging Loan Lending Criteria

Loan to value (LTV) Up to 65% LTV maximum on commercial property
Up to 80% LTV maximum on residential property
(100% finance is possible with other assets in the background)
Loan term 1 to 36 months
Loan amount £26,000 up to £250m
Interest options Rolled-up, retained or serviced
Interest types 1st, 2nd & 3rd charges
Interest rates From 0.75%
Decision Immediate decision in principle (DiP/AiP)
Completion Up to £300k in 3 days
Up to £750k in 7 days
Up to £250m from 2 weeks
Early repayment fees None
Availability Secured on assets in UK & Europe
Individuals, Companies, SPVs
No credit & adverse credit considered
Exit strategy Sale or refinance

Loan For Small Commercial Warehouse

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free no obligation quote for a commercial bridging loan.


Our 2024 Commercial Bridging Loan Guide

Commercial bridging finance is a valuable financial tool for buying and refinancing commercial and semi-commercial property or quickly cashing out equity for business purposes. 

Commercial bridging finance is a type of bridging finance that caters to a range of commercial needs—from investment property financing to urgent cash flow solutions—these loans are characterised by their high-value nature and the speed at which they can be arranged. With the ability to secure loans against commercial and residential investment properties, borrowers can access finance quickly to capitalise on time-sensitive business opportunities. This guide explores their diverse applications, terms, costs, eligibility criteria, and significant benefits and potential drawbacks, providing a comprehensive overview for commercial borrowers.

Commercial Bridging Loan For Hotel


What is a Commercial Bridging Loan?

A commercial bridging loan is short-term finance secured on commercial and semi-commercial property. It is used to purchase and refinance commercial and semi-commercial property or quickly cash out equity for business purposes. Due to its commercial nature, it is often a high-value loan completed quickly.

When the commercial venture is secured on residential investment property, the max LTV is up to 80%, and the loan would be eligible for lower rates from 0.44% per month versus commercial property, which attracts interest rates from 0.75% per month.

Commercial Finance For Conversion From Telephone Exchange

What can a Commercial Bridging Loan be used for?

Commercial bridging loans finance business ventures, typically buying or refinancing commercial property. However, as a multi-purpose loan, they can be used for any business need.

6 typical commercial bridging loan uses are: 

Other common uses include:   

Commercial Bridging Loan For Distribution Warehouse

Commercial property comes in various shapes and sizes – from office blocks and farms to factories, holiday parks, car parks, and care homes. Commercial bridging loans are a useful way to quickly secure short-term finance, which is secured against the borrower’s assets.

Care Home Financing Via Bridging Loan

Typical loan terms and criteria

Loan Amount: Bridging loans typically range from £26,000-£25,000,000, but Commercial Bridging Loans can be up to £250,000,000 depending on the borrower's circumstances, the assets used as security and the lender's risk appetite.

Loan-to-Value (LTV) Ratio: Lenders generally offer up to 65% LTV for commercial or 80% LTV for residential investment properties. 

Loan Duration: Bridging loans usually have terms of 1-36 months, although longer durations may be available depending on the lender.

Interest Rates: Rates of 0.75-2.00% per month are to be expected. These rates are higher than traditional commercial mortgages due to their short-term nature and perceived higher risk. Rates may be fixed or variable.

Interest Options: Bridging loans can have various repayment options, such as monthly interest payments, retained, rolled-up interest, or a combination.

Exit Strategy: Lenders will require a clear plan for repaying the loan, typically through selling the existing property or refinancing.

Large Disused Commercial Carpark For Development

Commercial Bridging Loan Costs

The five key costs of a commercial bridging loan comprise Interest, lender arrangement fee, broker fee, valuation fee and legal fees.

What commercial bridging loan rates will I pay?

Commercial property attracts interest rates from 0.75% per month.*
Residential property attracts interest rates from 0.44% per month
.*
Land with planning permission attracts interest rates from 0.75% per month.*
Land with no planning attracts an interest rate between 1.25%-2% per month.*
*Interest rates available will vary based on lender, land location and exit strategy.

How much will the lender's arrangement fee cost?

Lender arrangement fees are typically 2% for loans below £1m of loan amount.
Larger loans attract a lower rate of 1.5%.

How much will the broker fee cost?

Broker fees are usually 1-2% of the loan amount.

How much will the valuation fee cost?

Valuation fees vary greatly when it comes to commercial property. The number and type of loan security influence the cost of the survey. Unlike residential bridging loans, commercial bridging loans almost always require an in-person valuation.

How much will the Legal fee cost?

Legal fees vary greatly depending on the complexity of the loan and the number of assets being used as security. They can run from several hundred to several thousand pounds, depending on the situation. You'll be advised of anticipated legal fees at the time of application and be responsible for both the lender's legal fees and yours.

Commercial Bridging Loan To Buy A Commercial Redbrick Warehouse In London

Who uses a Commercial Bridging Loan? 

Commercial bridging loans are used by UK-incorporated entities, such as limited companies or Special Purpose Vehicles (SPVs), Channel Island incorporated entities and foreign nationals.

Semi-commercial Unit Purchased Using Commercial Finance


Eligibility for Commercial Bridging Loans

Borrower: Bridging loans are available to individuals and companies, including property investors, developers and businesses.

Creditworthiness: Lenders will assess the borrower's credit history by way of the borrower presenting their credit report, and if the borrower is a company, then the lender will review the annual filings for the company at Companies House. Commercial bridging loans are non-status so available to those who have no credit or bad credit.

Property Valuation: The property being purchased or offered as security and any additional collateral offered will be evaluated by the lender. This is typically completed by a surveyor of the lender's choosing or a desktop valuation.

Exit Strategy: A viable plan for repaying the loan must be demonstrated to the lender. Typically, this will be through refinance or sale of an asset.

Petrol Station Loan

In what situations can Commercial Bridging Loans help?

Commercial bridging loans are most commonly used when borrowers need funds quickly before they secure a longer-term finance solution or can repay the debt.

They can be used to quickly buy property in a competitive property market or complete a property transaction when a traditional loan is unavailable. 

Grocery Shop Finance

What properties can Commercial Bridging Loans be used to purchase? 

Commercial bridging loans can be used for various commercial property purchases, renovations and conversions.

These can include:

  • residential investment property (Buy-to-lets, HMOs, Student lets, Flat conversions)
  • agricultural investment (farm houses, out buildings, barns etc)
  • purpose-built industrial units
  • warehouses and distribution centres
  • data centres
  • factories and industrial plants
  • offices
  • retail units and mixed-use units
  • shops and shopping centres
  • restaurants and pubs
  • hotels and guesthouses
  • golf courses and leisure complexes
  • marinas
  • care homes
  • doctor & dental surgeries
  • and many other types of single properties or property portfolios. 
Marina Financing

Commercial Bridging Loan Features

 Bridging loans typically have the following features:

  • Short-term finance (usually between 3-12 months, but can be up to 36 months)
  • Fast to approve and can provide funds within 72 hours
  • Secured against existing property or a portfolio of properties 
  • Higher loan-to-values compared to other forms of finance 
Finance For Shopping Centre Regeneration Development

Advantages of commercial bridging loans


The major advantage of a commercial bridging loan is that it is the quickest method of raising substantial finance with a rapid approval process. A commercial bridge loan provides a fast short-term finance facility that can be arranged between 72 hours and four weeks, unlike the lengthy processing times associated with traditional loans.

Commercial bridging loan advantages:

  • Fast access to capital when compared to traditional financing.
  • No monthly payments because you only pay the interest and capital back at the end of the loan.
  • Highly flexible terms as the loan is secured against property, the lender risk is reduced.
  • More accessible to borrowers as they are typically non-status.

Disadvantages of commercial bridging loans

The biggest disadvantages of a commercial bridging loan are its high-interest rate and the risk associated with defaulting on the loan, leading to property repossession. 

Commercial bridging loan disadvantages:

  • Higher interest rates versus conventional mortgages and loans.
  • Large fees are charged for arrangement and brokerage.
  • The loans are short-term, with a maximum of 36 months.
  • Risk of property repossession upon default.
  • Repayment must be made on time, or hefty charges will be incurred.
  • Requires substantial collateral from borrowers.

Conclusion

In conclusion, a Commercial Bridging Loan is invaluable for businesses and investors seeking a fast financial solution for acquiring or refinancing commercial properties. This guide has unpacked the versatility of commercial bridging finance, highlighting its application across various scenarios, from urgent liquidity needs to strategic property investments. While offering a pathway to immediate funds and bridging gaps in cash flow, these loans also come with drawbacks, such as higher costs and the requirement of a solid exit strategy. Potential borrowers should carefully consider the benefits against the inherent risks and costs, ensuring that the terms of their commercial bridging loan align with their financial strategy and objectives for their commercial venture.


 

We're financial experts who arrange commercial bridge finance for companies, businesses, developers, investors and individuals, securing you the best commercial finance deals from UK specialist lenders, including private equity firms, private investors and family offices.

Get expert assistance today. We're on hand to answer any questions about commercial bridging loans.

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Call our friendly team 01202 612934we're ready to help.

Who is eligible for a commercial bridge loan?

Commercial bridging loans are suitable for businesses such as companies or SPVs including:

  • Private limited company – limited by shares (Ltd)
  • Private limited company – limited by guarantee (LBG)
  • Public limited company (PLC)
  • Limited liability partnership (LLP)

Foreign nationals, UK citizens and ex-pats are also able to obtain commercial bridges.

Are commercial bridging loans based on income?

No, bridging loans are not income-based. The qualification criteria for a bridging loan is based on the value of the property you wish to secure the debt against and having a viable exit. Whilst your credit report will also be taken into consideration it isn't the most important factor in the lender's decision making.

How long will I have to repay my commercial bridge loan?

Bridge loans are short-term loans, which typically range from 3 months to 24 months. However, you can choose to repay your loan early without penalty if you wish, as long as you adhere to the terms and conditions of your loan agreement.

What type of interest rates can I expect with a commercial bridge loan?

Interest rates for commercial bridge loans typically range from 0.75-2% per month, or 9-12% APR depending on the risk profile of your loan requirements. 

What kind of property can I use my commercial bridge loan for?

Commercial bridge loans can be used to purchase any type of investment properties for example, business premises, commercial property or residential property.

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