Commercial Bridging Loans
A commercial bridging loan is a short-term loan to purchase, refurbish or redevelop a commercial property. The loan is very similar to a residential bridging loan which is used to finance a gap for the short term such as:
- Awaiting a tenant (Commercial Buy to Lets)
- Commercial property auction
- Need to get experience as a commercial landlord in order to get a buy to let mortgage or get 1 years worth of accounts before remortgaging
- Change of use
- Refurbishment/redevelopment on properties that are unable to get a conventional commercial mortgage
- Chain break
- Cashflow injection (bridging loan/finance for business)
So long as the required security can be provided alongside a valid exit strategy for repaying the money, a commercial bridging loan can be used for almost any business-related purpose. From initial business establishment costs to financing tax liabilities to simply providing additional working capital as and when necessary.
To qualify for a commercial bridging loan, at least 40% of the property in question must be used for commercial purposes. For example, if the property combines a retail unit with a residential flat above, the commercial part of the property would need to represent at least 40% of its overall value.
Key Features of our Commercial Bridging Loans
- Available from £30,000 upwards
- Interest is rolled over so there are no monthly payments to be made, you would repay the whole balance, interest plus capital at the end of the term or when repaying the loan in full
- No early repayment charges or exit fees
- Available from 1- 18month term
- Can be on 1st and 2nd charge basis
- Available on HMO’s
- Farms and agricultural properties
Bridging used for business cashflow funding & repayment of existing bridging loan
The client was looking to borrow funds secured against her current residential property. Part of these funds were to repay the clients bridging loan (which had been used for renovation works to the property) and part were to gift to her son to invest into his business which was having short term cash flow issues. The clients curent residential property was of a sufficient value and the only charge was the bridging loan which she planned to repay. The current residential property was used as security and the client planned to sell this property and downsize into a smaller, more manageably sized property as she was struggling to maintain her current residence in her older age. The client needed the funds quite urgently as her sons business needed the cashflow by a certain date. UK Property Finance worked closely with the client and her solicitor to meet the deadline.
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To find out more please fill in our quick online enquiry form and one of our trained commercial specialists will give you a call to go through your requirements