Key Takeaways
- Fast access to funding: Commercial bridging loans are designed for quick property purchases or financial needs.
- Short-term solution: Loans typically last up to 12 months with no long-term commitment.
- Wide range of uses: From auction purchases to property renovations or breaking commercial property chains.
- Expert support: At Bridging Finance, we compare rates on your behalf, provide tailored advice and assistance at every step, free of charge.
Use our calculator below to get a rough estimate on how much you could borrow, and how much it’ll cost. It is applicable for commercial bridging loans.
What Is a Commercial Bridging Loan?
A commercial bridging loan is a short-term financing solution designed to bridge the gap between the purchase of a property and securing long-term funding or releasing other capital.
It’s ideal for business owners, property investors, and developers who need quick access to substantial funds.
At Bridging Finance, we specialise in helping clients secure competitive and tailored bridging loans for their commercial needs.
How Does a Commercial Bridging Loan Work?
The process for securing a commercial bridging loan is straightforward but benefits significantly from professional guidance. Here’s how it typically works:
- Eligibility assessment: Using a bridging finance calculator, determine your loan-to-value ratio and potential costs.
- Initial consultation: Discuss your needs with our brokers, who can provide honest advice tailored to your circumstances.
- Decision in principle: Receive an indicative offer within 24-48 hours to strengthen your purchasing power.
- Valuation and application: A valuation confirms property values, and our team assists with completing your formal application.
- Funds release: Approved funds can be available in as little as 72 hours for urgent transactions.
- Repayment: Repay the loan upon securing long-term funding or selling the property.
At Bridging Finance, we manage the entire process, handling paperwork and liaising with all parties to ensure a smooth experience.
Why Choose Bridging Finance?
- Speed: Fast approvals, often within days.
- Flexibility: Tailored loans for diverse commercial needs.
- No fees: Unlike many brokers, we provide our services free of charge.
- Expert guidance: Navigate the complex bridging loan market with ease.
Types of Commercial Property You Can Purchase With a Bridging Loan
Commercial bridging loans can be used for a wide variety of property purchases, including:
- Offices and office buildings.
- Retail premises and shopping centres.
- Industrial units and warehouses.
- Mixed-use properties.
- Hotels, guesthouses, and holiday lets.
- Land (with or without planning permission).
- Properties requiring significant renovation or deemed unmortgageable.
- Auction properties with tight deadlines.
If your desired property isn’t listed here, contact us, and we’ll explore bespoke solutions for your needs.
Costs and Fees Associated With Commercial Bridging Loans
While bridging loans are incredibly flexible, understanding the costs is crucial. Here’s a breakdown of common charges:
Interest Rates
- Typically range from 0.68% to 1% per month.
- Rolled-up interest is added to the loan balance, freeing cash flow for other expenses.
Facility Fee
- A one-time charge of 1.5% to 2% of the loan value.
Other Costs
- Valuation fees: £950 on average, though desk-based valuations may be available for smaller properties.
- Legal fees: Approximately £1,000 for properties worth £250k.
- Redemption fees: Usually around £100-£150 to remove legal charges once the loan is repaid.
No Hidden Costs
At Bridging Finance, we avoid lenders with exit fees and outdated practices, ensuring a transparent process.
When Should You Consider a Commercial Bridging Loan?
A commercial bridging loan is an excellent option in situations where time is of the essence or traditional financing options fall short. Common scenarios include:
- Auction purchases: Meet tight deadlines with funds ready in days.
- Unmortgageable properties: Buy and refurbish properties deemed unsuitable for traditional mortgages.
- Buy before sell: Avoid property chains by purchasing your new premises before selling the old one.
- Refinance or extend timeframes: Bridge gaps while waiting for other funding to come through.
Eligibility for a Commercial Bridging Loan
Loan-to-Value Ratio (LTV)
Eligibility primarily depends on your loan-to-value (LTV) ratio, with a maximum of 80%. This includes:
- The loan amount.
- Any existing mortgage debt.
- The combined value of the properties used as security.
Exit Strategy
A sound exit strategy (e.g., sale proceeds or refinancing) is critical to approval. Unlike traditional loans, income and credit score are less significant.
Expert Assessment
At Bridging Finance, we assess your eligibility during an initial consultation, ensuring you have a clear understanding of what’s achievable.
Benefits of Choosing Bridging Finance
- Specialist knowledge: Our team knows the intricacies of commercial bridging finance, tailoring solutions to your specific goals.
- Wide lender network: We work with a range of lenders to secure the best rates and terms.
- Transparent service: No hidden fees or unexpected costs.
- Efficiency: From initial quote to fund release, we streamline the process to meet your deadlines.
Common Questions About Commercial Bridging Loans
How quickly can I secure a bridging loan?
With the right documentation and support, funds can be available in as little as 72 hours.
Do I pay interest monthly?
Most clients choose to roll up interest into the loan value, paying it as a lump sum upon repayment.
Can I get a loan with bad credit?
Yes. Bridging loans focus on your exit strategy rather than credit history.
What happens if I can’t repay?
If repayment isn’t possible, lenders may repossess the property. Our team works with you to prevent this, ensuring a sound exit plan is in place.
Start Your Bridging Loan Journey Today
At Bridging Finance, we are committed to helping you unlock opportunities with tailored commercial bridging loans. Whether you’re an investor, developer, or business owner, we provide expert advice and support from start to finish. Contact us for a no-obligation consultation and discover how we can help you secure the funding you need—quickly and efficiently.