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.

It can be used to finance a gap in the short term, such as:

  • Awaiting a tenant (commercial buy-to-let).
  • Commercial property auction.
  • You need to get experience as a commercial landlord in order to get a buy-to-let mortgage or get 1 year’s worth of accounts before remortgaging.
  • Change of use.
  • Refurbishment or redevelopment on properties that are unable to get a conventional commercial mortgage.
  • Chain break.
  • Cash flow injection (bridging loans and financing for businesses).

Key features of our commercial bridging loans:

Features include:

  • Available from £30,000 upwards.
  • Interest is rolled over.
  • No early repayment charges or exit fees.
  • Available from 1–18 month term.
  • It can be on a 1st and 2nd charge basis.
  • Available on HMO’s.
  • Farms and agricultural properties.

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.

As long as the required security can be provided alongside a valid exit strategy for repaying the money, commercial bridging loans 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, a business bridging loan requires that at least 40% of the property in issue be used for commercial purposes.

For example, if the property includes a retail unit and a residential flat above, the commercial portion of the property must account for at least 40% of the total value.

Case study

Bridging is used for business cash flow funding and repayment of existing bridging loans.

The client was looking to borrow funds secured against her current residential property. Part of these funds were to repay the client’s bridging loan (which had been used for renovation works on the property), and part were to gift them to her son to invest in his business, which was having short-term cash flow issues. The client’s current residential property was of sufficient value, and the only charge was the bridge 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 manageable-sized property as she was struggling to maintain her current residence in her older age. The client needed the funds quite urgently, as her son’s business needed cash flow by a certain date.

UK Property Finance worked closely with the client and her solicitor to meet the deadline.