Commercial Bridging Loans: Rates, LTV and How They Work in 2026

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Commercial bridging loans are a form of short-term property finance secured against commercial or semi-commercial property.

They’re used by property investors, business owners and developers who need fast access to capital, usually to buy, refurbish or refinance commercial property before exiting onto longer-term finance.

Commercial bridges are usually unregulated, more flexible in their criteria than mainstream commercial mortgages, and can complete in days rather than weeks.

What is a Commercial Bridging Loan?

A commercial bridging loan is a short-term loan secured against commercial property. The term is typically 1 to 24 months, although 6 to 12 months is the most common.

The loan is interest-only, with the interest either paid monthly (serviced), deducted upfront (retained) or added to the balance and repaid at the end (rolled-up).

At the end of the term, the loan is repaid in full. This is known as the exit, and lenders will only offer terms once they’re comfortable that the exit is credible.

Commercial bridges can be secured against a wide range of commercial property, including:

  • Retail units and shops
  • Offices
  • Industrial units and warehouses
  • Hotels and pubs
  • Restaurants and takeaways
  • Petrol stations
  • Care homes
  • Mixed-use property (semi-commercial)

The property doesn’t have to be tenanted. Vacant commercial property is acceptable, and bridging is often used specifically for vacant property awaiting tenants or refurbishment.

When to Use a Commercial Bridging Loan

Commercial bridges are the right product in specific scenarios, not as a general-purpose business loan. The clearest use cases are:

  • Auction purchases – Where 28-day completion is required and no commercial mortgage can be arranged in time.
  • Refurbishment projects – Funding the purchase and works on a commercial property before refinancing onto a term loan at the improved value.
  • Chain breaks – Where a commercial property purchase is at risk due to a delay in selling another property.
  • Change of use schemes – Buying commercial property to convert (for example, office to residential) where the exit is the sale or refinance of the completed scheme.
  • Capital raises – Releasing equity from existing commercial property for business purposes.
  • Vacant property purchases – Where the property doesn’t yet meet the income criteria for a commercial mortgage.
  • Bridging to a sale – Where a property is being sold but cash is needed in the meantime.

If the use is longer-term, a commercial mortgage will usually offer significantly lower rates. Bridging is a short-term tool, not a long-term funding solution.

Commercial Bridging Loan Rates 2026

Commercial bridging rates in 2026 typically range from 0.75% to 1.5% per month. Most deals price in the 0.85% to 1.10% per month band.

These rates are higher than residential bridging because commercial property has a smaller buyer pool, longer typical sale times and a wider range of valuation outcomes.

The factors that drive the rate offered are:

  • Loan to value – The single biggest driver. Sub-60% LTV unlocks the sharpest pricing.
  • Property type – Standard retail and offices price better than specialist property such as petrol stations, care homes or pubs.
  • Property condition and tenancy – Tenanted, well-maintained property is preferred. Vacant property attracts a premium.
  • Exit strategy – A clear, credible exit (refinance onto a commercial mortgage, or sale) gets sharper pricing than a speculative exit.
  • Borrower experience – Experienced commercial property investors with a track record price more keenly.
  • Loan size – Loans above £1m often benefit from competitive lender appetite and sharper rates.

Interest is usually rolled up or retained on commercial bridges, meaning no monthly payments are required during the term. This protects cash flow but increases the total cost.

How Much Can You Borrow?

Maximum loan to value on commercial bridging in 2026 is generally:

  • Up to 70% LTV on standard commercial property
  • Up to 65% LTV on specialist or non-standard property
  • Up to 75% LTV on semi-commercial (where the residential element is significant)

Loans typically range from £50,000 to £25m, with no real upper limit for the right deal.

For development or heavy refurbishment projects, lending is often structured against the gross development value (GDV) rather than current value, capped at 65% to 70% LTGDV.

Some lenders will go higher with additional security, a personal guarantee or strong borrower covenant.

Fees on Commercial Bridging Loans

Beyond the headline rate, commercial bridges come with several fees that affect the total cost of borrowing:

  • Lender arrangement fee – Usually 1.5% to 2% of the loan amount. Added to the loan in most cases.
  • Valuation fee – Commercial valuations are more involved than residential and cost more. Typical range is £750 to £5,000+ depending on property size and complexity.
  • Legal fees – You’ll pay both your own and the lender’s legal fees. Budget £2,000 to £5,000+ for most cases.
  • Broker fee – Where applicable. At ABC Finance we don’t charge broker fees on commercial bridges where the lender pays us a procuration fee.
  • Exit fee – Some lenders charge an exit fee, typically 1% of the loan amount or one month’s interest.

When comparing quotes, always look at the total cost of borrowing over the expected term, not just the monthly rate.

The Importance of the Exit Strategy

The exit strategy is the single most important factor in a commercial bridging application.

The two most common exits are:

  • Refinance onto a commercial mortgage at the end of the bridge
  • Sale of the property

For a refinance exit, lenders will want to see that the borrower will likely qualify for a commercial mortgage at the end of the term. This usually means evidence of income (for owner-occupied), strong tenancy and lease terms (for investment), and that affordability stacks at typical commercial mortgage rates.

For a sale exit, lenders want to see that the property is realistic to sell within the term. This usually means a property with broad market appeal, an appropriate price guide and ideally evidence of marketing already underway.

A weak or speculative exit will either lead to a decline, or to a more cautious lender at a higher rate.

Commercial Bridging Loan Criteria

Most commercial bridging lenders will consider the following:

  • Maximum LTV of 70% on commercial property
  • Loan sizes from £50,000 to £25m+
  • Terms from 1 to 24 months
  • Available to individuals, limited companies, LLPs, SPVs, offshore companies, pension funds and trusts
  • Adverse credit considered (with the right lender)
  • Available across England, Wales, Scotland and Northern Ireland

Commercial bridging is largely unregulated by the FCA. This gives lenders more flexibility on criteria, but also means borrowers don’t benefit from the consumer protections that apply to regulated lending.

Tips for a Successful Application

When applying for a commercial bridging loan, the following helps:

  • Have a clear, written exit strategy
  • Prepare property details, photos and any existing valuations
  • Have ID, address verification and asset and liability information ready
  • If the property is tenanted, prepare leases and rent receipts
  • If there’s an existing mortgage, get the redemption statement ready
  • Decide upfront whether you want interest serviced, retained or rolled up

Commercial bridging applications usually take 2 to 4 weeks from enquiry to completion, but can be faster for straightforward cases where the property has a clean title and a simple structure.

If you’d like help structuring a commercial bridge or finding the right lender for your circumstances, get in touch with our team. We have access to specialist commercial bridging lenders across the market and can match your application to the right lender quickly.