Commercial Bridging Loans
A commercial bridging loan is not very different to a standard residential bridging loan. It is normally used to complete on one property whilst awaiting the sale of another. Commercial bridging loans can also be used when a commercial property has been purchased at auction when completion is required within 28 days. Commercial bridging loans can also be used by a business if it needs quick finance to keep it going, pay tax or some other bills when cash flow is a bit short.
Commercial loans are in fact still unregulated and therefore require a higher burden of proof however commercial bridging finance is secured on the value of the commercial property and therefore are easier to obtain. This makes the life of the legal organiser much easier. Self Employed workers often take advantage of bridging loan deals when looking to move into larger premises. Often these transactions can be done quickly and profitably. The specialist bridging sector has in fact grown by 50% every year since 2002 and there are no signs that that growth is slowing. Ironically with more repossession occurring the need for commercial bridging loans is increasing as more of these properties are put up for auction. Commercial bridging is often done at around 65-80% loan to value capped at around ?10 million. It seems that commercial bridging is as yet not been adversely affected by the global credit crunch.