A commercial bridge loan is a short-term financing option designed to provide businesses with the capital needed to seize real estate opportunities quickly. Whether you’re looking to purchase, renovate, or stabilize a commercial property, bridge loans offer a flexible and fast solution for investors and businesses alike
1. Speed of Funding
2. Flexibility in Use
3. No Early Repayment Charges (ERCs)
4. Strategic Risk Management
5. Unlock Equity Without Remortgaging
6. Ideal for Property Investors and Developers
7. Cost-Effective for Short-Term Needs
8. Additional Funding Without Refinancing
9. Business Expansion and Investment
By choosing a commercial bridging loan, property investors and developers can access funds quickly, maintain their existing mortgage terms, and leverage the equity in their property for various investment opportunities, all while managing risk and avoiding penalties associated with traditional refinancing.
Commercial bridging loans are short-term, interest-only financing options secured against commercial properties. These loans provide a quick and flexible way to access capital for business opportunities, property investments, or urgent financial needs without disrupting existing long-term financing arrangements.
The loan amount is determined based on the value of the commercial property and the borrower’s financial profile. Lenders carefully assess the property’s potential, the borrower’s exit strategy, and the overall viability of the proposed use of funds.
Repayment is typically made once the borrower has achieved their commercial objective, such as selling the property, refinancing with a traditional commercial mortgage, or completing a development project. Commercial bridging loans are designed for rapid processing, with funds often available within days—making them an ideal solution for businesses and investors who need fast access to capital to seize time-sensitive opportunities.
A commercial bridging loan allows you to unlock equity in your property without altering your existing mortgage. This is particularly beneficial if you have a low-interest first mortgage and want to avoid refinancing at a higher rate or incurring early repayment penalties.
1. Property Purchases
Commercial bridging loans are ideal when you need to secure a new property quickly but are awaiting the sale of an existing property. They provide the necessary funds to bridge the gap, ensuring you don’t miss out on time-sensitive opportunities.
2. Auction Purchases
If you’re buying a property at auction, where immediate payment is required, a bridging loan offers quick access to funds, allowing you to meet tight deadlines before arranging long-term financing.
3. Property Development or Renovation
For developers or investors, these loans can cover costs for purchasing land, construction, or renovations. Once the project is completed, the property can be sold or refinanced to repay the loan.
4. Business Expansion or Acquisition
Bridging loans offer fast capital for expanding your business or acquiring another company, enabling you to act swiftly while securing long-term financing later.
5. Cash Flow Challenges
For businesses facing temporary cash flow gaps or unexpected expenses, a commercial bridging loan provides short-term relief until revenue streams stabilize.
6. Time-Sensitive Opportunities
When an urgent business or investment opportunity arises, such as discounted inventory or a prime property deal, bridging loans allow you to act immediately without waiting for traditional financing.
A commercial bridging loan is a short-term financing option designed for businesses to quickly access funds for commercial property transactions. These loans typically last from a few months up to 18 months and are secured against commercial real estate. They're often used to purchase, renovate, or refinance commercial properties when traditional financing isn't immediately available
Commercial bridging loans are known for their quick approval and funding process. Many lenders can provide funds in as little as 3 to 7 days, making them ideal for time-sensitive opportunities like property auctions or urgent business needs
Commercial bridging loans can be used for various purposes, including:
Purchasing commercial property
Renovating or refurbishing existing commercial spaces
Acquiring businesses
Covering unexpected expenses or cash flow gaps
Funding property development projects
Buying property at auction
Commercial bridging loans can be secured against a wide range of property types, including:
Office buildings
Retail spaces and shopping centers
Warehouses and industrial units
Restaurants and pubs
Mixed-use properties (e.g., shops with flats above)
The amount you can borrow typically ranges from £100,000 to £15 million, depending on the lender. Most commercial bridging loans offer up to 75% of the property's value (LTV). The exact amount will depend on factors such as the property's value, your exit strategy, and the lender's assessment of the project's viability
Unlike traditional mortgages, commercial bridging loans often don't require monthly repayments. Instead, the interest is usually "rolled up" and paid along with the principal at the end of the loan term. Repayment is typically made through refinancing with a long-term loan, selling the property, or using other business proceeds. It's crucial to have a clear exit strategy in place when taking out a commercial bridging loan
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