Commercial Bridging Loans

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What is a Commercial Bridge Loan?

Commercial bridging loans are, as their name suggests, bridging loans that are secured against commercial property. They are used to secure funds quickly to purchase, or release funds from a property.

For instance, if you are looking to purchase a commercial property under auction conditions and must complete in 28 days, a commercial mortgage would be almost impossible. A commercial bridging loan would be used to fund the purchase on time.

Read on below to find out more or fill in the form to talk to an expert.

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Latest Commercial Bridging Finance Offers

View some of the latest commercial bridging finance on offer from major lenders.

Product BL0016 - Apply Now
Interest Rate
0.65%
Lender Fee
2.00%
Max LTV
50%
Security Type
Commercial
Min-Max Loan
£50,000 - £10,000,000
Max Term
24 Months
Regulated Accepted?
No
Product BL0025 - Apply Now
Interest Rate
0.83%
Lender Fee
2.00%
Max LTV
70%
Security Type
Mixed Use & Commercial
Min-Max Loan
£100,000 - £5,000,000
Max Term
18 Months
Regulated Accepted?
No
Product BL0031 - Apply Now
Interest Rate
0.99%
Lender Fee
2.00%
Max LTV
75%
Security Type
Commercial
Min-Max Loan
£50,000 - £10,000,000
Max Term
24 Months
Regulated Accepted?
No
CLICK HERE TO COMPARE MORE MARKET LEADING PRODUCTS

Criteria

Below are the main criteria points to consider when taking out commercial bridging finance.

1Up to 75% Loan to Value (or 100% with additional security).
2Property in a poor state of repair considered.
3Rates from 0.65% per month.
4Loans from £25,000 with no maximum loan size.
5Borrow from 1 month up to 24 months.
6Any security considered.
7Interest can be rolled into the loan.
8Loans with no early repayment charges available.
9We will consider any exit route.
10Refurbishment or conversion accepted.
11Adverse credit accepted.
12Loans available throughout the UK.

How Much Can I Borrow?

Commercial bridging loans are usually available up to a maximum of 75% of the property’s value. Our minimum loan is only £25,000 and we don’t have a strict maximum loan, meaning we can fund practically any loan.

How Much Will It Cost?

Commercial bridging lenders tend to price each loan on risk. They will look at the type of property, location and you as the client. The best rates usually start at around 0.65% per month.

As a guide, an interest rate of 1% per month is a good benchmark. For a riskier deal, such as an unusual property or a client with heavy adverse credit, rates will be around 1% – 1.75% per month.

Most lenders charge a lender fee, usually 2% of the loan amount. In some cases, they also charge an exit fee. This tends to be 1% of the loan amount, or one month’s interest. These fees can usually be added to the loan.

How Long Do They Take to Complete?

We can complete commercial bridging loans the same day, if all information, including the valuation and legal pack is completed and satisfactory.

Generally, it is worth allowing between five days and 3 weeks to complete to allow for any unforeseen delays.

What Is the Role of A Broker?

A broker will search for the best deal for you and will manage the application process from start to finish. There are a number of benefits to working with a reputable broker:-

  • A good broker will ensure that you exit strategy is solid and realistic.
  • Many bridging finance lenders will only work with brokers, meaning they can’t be accessed directly. This will give you a wider choice of lenders.
  • They will usually save you money.
  • We act for you, protecting your best interests at all times.
  • Although a broker may find you a cheaper rate, it’s important that you don’t then lose any savings made by paying large fees.

    We don’t charge broker fees for bridging loans over £100,000.

    Key Points to Consider Before Taking Out A Commercial Bridging Loan

    Taking out bridging finance is a big decision and it needs to be handled correctly. As such, you should never rush when making your decision, even if you need to complete quickly.

    There are some key considerations, which if made upfront, can save a lot of problems further down the line. They are:

  • Is a bridging loan the best option for me? Could I be better served with a commercial mortgage?
  • How will I repay the loan? Is my exit plan reasonable and what happens if it fails?
  • Should I look to pay the interest monthly, or allow it to compound monthly onto the loan?
  • In addition, you should consider the following about any product that you’re looking to take:

  • What is the total cost of the loan? This should include interest, fees and other charges.
  • Will the term offered be sufficient for my exit strategy to come to fruition?
  • How does the lender handle defaults? Some lenders charge extremely high default interest rates.
  • What happens if you repay the loan early? Do you still have to pay all of the interest?
  • When using a broker, they should be able to tell you the answers to these questions for any option presented.

    What Types of Property Can You Lend Against?

    We can offer this type of finance against almost any security. Our commercial options are often used to fund:

  • Offices
  • Professional practices
  • Care homes
  • Pubs and bars
  • Restaurants
  • Hotels
  • Guest houses
  • Retail premises
  • Business parks
  • Warehouses
  • Factories
  • Large HMOs
  • Semi-commercial units
  • Places of worship
  • What Term Can You Offer?

    We can offer terms from one month up to three years, depending on what you need. Most of our loans are between 1-12 months.

    about-the-author-gary-hemming

    About The Author

    This content was produced by our Commercial Lending Director, Gary Hemming. Gary has over 15 years’ experience in financial services and specialises in bridging loans, commercial mortgages, development finance and business loans. He is widely respected in his field and regularly provides expert commentary for specialist trade publications, specialist business press as well as local and national press.

    Gary Hemming CeMAP CeFA CeRGI CSP  -  
    Commercial Lending Director

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