Commercial Bridge Loans & Bridging Finance
Commercial bridging loans offer a short-term funding solution for businesses, landlords, property developers and land owners in the UK. You can take a commercial bridge loan out over terms as little as 2 weeks or up to 3 years, and it can be used as a form of interim finance secured against an asset.
Our advisers have access to the best commercial bridge mortgage loans in the market and will be able to guide you through the process, application, and securement of bridging finance. Contact our team today for free bridging advice.
FREE commercial bridging loan consultations
Commercial bridge loans we can help with
What is a commercial bridging loan?
A commercial bridging loan is a type of short-term finance solution to help investors purchase commercial properties. At Bridging Options, we offer loans based on your individual circumstances and can help you secure the most appropriate loan with the best interest rates for your investment property.
How does a commercial bridging loan work?
Commercial bridging loans provide short-term finance to facilitate a property purchase or release funds from an existing commercial property.
These types of loans tend to have a term period of around 12-24 months. Typically, the interest rate on a commercial bridging loan is likely to be much higher than that of a traditional commercial mortgage. This is usually because the bridging loan is more risky for the lenders and is provided as a short-term solution.
Borrowers can secure the loan based on the valuation of their desired commercial property and use the funds for acquisition. They will need to have a clear exit strategy in place to repay the loan, which can include selling the estate or securing long-term financing such as a commercial mortgage.
What can a commercial bridging loan be used for?
Commercial bridging loans can be a helpful tool for commercial property investors and businesses. They are a smart option for when traditional commercial mortgages are not viable.
You can use our commercial bridging loans for a number of circumstances:
Commercial property purchases
A commercial bridging loan can be a useful financing option for purchasing a commercial property, especially if you need to act quickly or have unique circumstances that make it more challenging to secure traditional financing. A commercial building is used for business purposes and might include office spaces, hotels or shopping centres.
Using a commercial bridging loan for purchasing retail units can be a quick and hassle-free solution to starting your new investment. Retail space can be standalone shops, a unit within a shopping centre or a commercial space intended for retail use. Since you’ll likely be competing to secure your ideal retail property, commercial bridging finance is an excellent way to get ahead and snap up the purchase.
Commercial bridging loans offer a practical finance solution for purchasing industrial estates such as warehouses, distribution centres or manufacturing facilities. Using commercial finance for industrial units is a faster way to secure the funds for your venture and purchase your desired property.
What percentage can you borrow on commercial property?
The percentage you can borrow for commercial properties will usually depend on your eligibility and the value of the property you intend to purchase. The loan amount you can secure will typically be between 65% and 75% of the property value, although this can vary depending on lenders.
Our commercial bridging loan service
At Bridging Options, we understand that finding the best finance solutions for your commercial purchases can be time-consuming, which is why we want to make securing a bridging loan simple.
We provide commercial finance options to clients for a variety of ventures, including:
Looking to grow their property portfolios quickly.
Looking to secure short-term funding for business needs
Hotels and development investors
Looking to get ahead of competitors and secure their purchase quickly.
Looking to expand their buy-to-let investments.
FAQs on Commercial Bridge Loans
For more information about our commercial bridge loans, please take a look at some of our most frequently asked questions below:
While they both offer short-term and flexible finance solutions, there are some slight differences between a commercial bridging loan and a residential bridging loan, including their intended use and property types.
A commercial bridging loan is typically used to facilitate the purchase of commercial properties, such as retail units, office spaces and industrial units. Alternatively, a residential loan is used to purchase and facilitate residential properties, such as buying a new home before selling your current one or as a form of development finance.
Commercial bridging finance tends to have higher interest rates than residential bridging finance due to the increased risks associated with commercial properties. Since these types of property are often used for business purposes, they can come with more complexities and a more significant fluctuation in value. This can result in commercial lenders charging higher rates.
Our services offer a comprehensive market view, meaning you can access some of the most competitive loan rates out there.
When applying for a commercial bridging loan you will have to secure the finance against an asset that is already owned by your business. All lenders have slightly different criteria for what they will secure the finance on.
Our panel of expert advisers and brokers will be able to assess your current commercial assets and advise you on how best to secure your commercial bridging loan finance.
Assets that are typically used for securing commercial bridging loans are property, land, vehicles, & machinery.
When you apply for commercial bridging finance, you will be securing the loan against an asset as outlined above.
This is because commercial bridge finance is a short-term quick financing option, lent against an asset; therefore, the checks have to be made quickly and finance to be secured fast.
By securing against an asset it reduces the risk to the commercial bridging lender. They will be lending against a security that you own, thus reducing the risk and speeding up the underwriting process.
The amount of finance available depends on the value of your assets and how much you can secure against your existing asset.
Our brokers have access to large panel of specialist lenders who can go up to as high as 80% of the asset value.
But this will depend on the type of asset you have for bridging. Commercial loans will be assessed on an individual basis with the support of our advisers.
Typically bridging loans in the UK will be anywhere between £25,000 to £20 million.
It is possible to borrow more though, and our advisers have experience in working on large bridging loans for commercial purposes.
Our brokers and advisers understand that every business in the UK is individual. No one company will have the same finance requirements, and as such, each case will be assessed on its merits, leading to the best possible loan agreement.
There could be many different reasons as to why you want to apply for a commercial market bridge loan, many of which we’ve listed near the top of this page (click up to Corporate Bridge Loans).
We asked our advisers to come up with the top reasons that businesses and corporate customers seek commercial mortgage bridge loans or finance for other needs. Here’s what they said:
- Investment opportunities: With many investment opportunities being of a time sensitive nature, commercial bridging loans finance can be the quickest option to meet the tight deadlines, securing the finance you need for your investment. Business investment opportunities come in many forms; from purchasing new stock to buying land or a commercial unit. Our panel of expert commercial bridging finance brokers will work with you quickly to secure the finance that your business needs with some finance agreements being turned around in as quickly as 48 hours.
- Increasing commercial opportunities: With investment comes opportunity. Our specialists have helped business owners secure finance quickly for new machinery and staffing letting them to pursue new business ventures or increase their existing productivity. This can be particularly helpful for businesses during expansion periods. Business expansion can be a very expensive time and can happen very quickly with new contracts or tenders requiring additional mechanical or man power. Our experts will can discuss with you the best way to finance your expansion plans and arrange to secure finance quickly and easily.
- Commercial refurbishment: Organising commercial bridging finance for refurbishment of an office, warehouse, shop or any other company-owned premises can be expensive. With a quick finance arrangement, the loan can be repaid by the commercial mortgage after the property has increased in value following the work.
- Commercial relocation: As businesses expand the need for new premises can sometimes be the only choice. In 2018 the average commercial property sale took 96 days from start to finish. When relocating your business there is many costs to consider and purchasing the property is one of them as well as fees and moving costs themselves. With a commercial mortgage bridging loan, you can speed up the process as you have the available funds to purchase the property and relocate your business. It can also minimize the impact of the relocation, allowing you to seamlessly organize the move from one property to another. The loan can then be repaid when your previous property sells, and you have received the money.
- Commercial buyouts: When negotiating a buyout, in most cases all parties want the negations to be completed quickly to avoid any change of heart or creating a drawn-out process. Having your finances in order can be key to completing a commercial buyout in a timely manner. Bridging finance can be arranged in under 48 hours meaning that once the deal is negotiated and all parties have agreed, you can then instruct the sale of shares and release the funds for sale.
They are flexible funding options designed to be used over a short period of time.
When borrowing against an asset with commercial property bridge loans or corporate bridging finance you are able to choose finance throughout the life of the loan or take the interest roll-up option.
This lets you and your broker tailor the loan to your company requirements and cash flow.
The serviced option is the alternative for businesses and means that throughout the term of your loan you will be making monthly payments that cover the interest and associated fees.
This means that when the loan amount comes to be repaid, you will be paying back the original amount borrowed as you have serviced the debt throughout the life of the commercial bridging finance agreement.
It’s possible to apply for finance no matter who large or small your business is. Bridging finance is available to companies with as little 1 to 10 employees, through to large corporations with thousands of members of staff.
However, the amount that you can borrow will depend on the assets that you can secure your loan against.
For small businesses this can mean securing against multiple assets to unlock the finance needed.
Applying for commercial bridge loans over multiple assets is not a problem, and our panel of experts have access to a range of lenders who specialize in small corporate bridging finance agreements.
It will let you get the money you need quickly for your next small business project, expansion, or VAT bill.
All you need to do is contact us and we will help you explore the options available to you as a small business.
One of the main benefits to bridging finance is the speed in which the funds can be released.
When you first speak to one of our expert advisers please tell them how quickly you need to receive the funds by as this could affect the lenders approached on your behalf.
We have seen finance released to the client in as little as 48 hours, although the average loan takes two weeks from initial enquiry to completion before the funds become available.
A second charge bridging loan is short-term finance secured on a commercial property that already has a mortgage on it.
Second charge bridging finance is not uncommon, and many lenders are happy to be a second charge on the property.
This can require additional work as it will need a sign-off approval from your existing lender, but this is easily managed for you by our specialists and your appointed solicitor.
When using a second charge commercial bridging loan you can only borrow based on the equity that you own in the property.
We have provided an example of this below:
- Client: Typical business customer
- Property value: £500,000
- Commercial mortgage (1st charge): £250,000
- Equity in the property: £250,000
- Maximum second charge available: £200,000
The application process is made very simple due to the expert knowledge of our brokers and advisers.
From an initial enquiry to completion, one of our advisers will work with you to source and secure the most suitable finance available, including the best possible rates and lender agreements.
To start your enquiry simply get in touch with us over the phone or by completing an enquiry form.
That way you can take advantage of a free phone consultation where a member of our team will ask a few questions to better understand your financing needs.
Once that’s done, we can agree on next steps, before working on your behalf to review which of the UK commercial bridging lenders can give you the best options.
Like anything in business, planning and preparation is critical.
To give you an idea what a lender might look at when assessing your company against their criteria, we have compiled the list below. This outlines the various factors involved, including what our adviser might ask from you.
- What is your exit strategy?
- What are you planning to use the finance for?
- How much deposit or equity do you have?
- Where is your business located?
- What is your credit rating?
- What experience do you have in property development?
The exit strategy for your loan is simply how you plan to repay the amount owed at the end of the agreed term.
The most common exit routes are refinancing the bridging loan either using a commercial mortgage, business loan, or property/asset sale.
Your appointed advisers will work with you to best understand how you plan to exit, and document this to present the potential lenders when agreeing the terms of your finance.
Contact the team at Bridging Options now for your free phone consultation.
Try to have as much of the information we described in step 12 as possible, including any considerations on what your potential assets will be to secure the finance.
Having as much information as possible lets our advisers and brokers work on the best possible finance outcome for you.
Our team will assess your individual needs and introduce you to an experienced bridging expert to match your needs and circumstances.
In the first instance you still might want to call us, as we can offer some advice to you on a no-obligation basis for the time when you are ready to proceed.
Why choose Bridging Options?
As a commercial property investor, we understand the importance of securing finance quickly and efficiently in time for your next property venture. That is why we created Bridging Options, to help businesses and commercial property investors secure the finance they need with ease and access the best deals on the market.
With our access to various commercial bridging lenders, we can regularly help clients secure the most suitable commercial bridging loans for their unique circumstances. We provide affordable fees and the lowest monthly payments possible.
Choose Bridging Options to arrange commercial bridging finance for your next commercial property. Contact us today for an informal chat and a free, no-obligation quote.