Commercial bridging finance can be used on typical commercial properties including offices, retail units, industrial, leisure or healthcare buildings.
Perhaps the simplest definition of a commercial bridging loan is that of a short-term loan secured against commercial property. In common with all other forms of bridging loan they are used to secure funding quickly, either to purchase a property or to release funds quickly from a property the borrower already owns.
Typical commercial properties include offices, retail units, industrial, leisure or healthcare buildings. Of course, there are a myriad of other forms commercial properties can take but to qualify for a commercial bridging loan the property used as security must be at least 40% commercial. For example, if the property is a shop with a flat above the commercial part of the property will have to represent more than 40% of the total property and lenders will usually insist on separate access to the flat.
Commercial bridging loans are a great option for private landlords and property investors looking to acquire commercial units. In many instances these units will be refurbished or renovated before being either refinanced onto a conventional commercial mortgage or simply sold. Improved properties with an enhanced value and paying tenants in place for 6-9 months can be a very attractive proposition for specialist Buy to Let lenders.
Commercial bridging loans are, as their name implies, bridging loans that are secured against commercial property.
There are many ways in which businesses can use a commercial bridging loan. Common uses are to cover short-term cashflow issues or to finance tax liabilities. More positively they can be used as working capital and by new businesses as a cashflow injection to acquire additional stock or even to acquire new equipment or premises for the business. Beyond these examples there are a huge variety of ways in which commercial bridging loans can be used.
To qualify for a commercial bridging loan the overall use of the property being used as collateral will need to be at least 40% commercial. For example, if the property is a rental unit with a flat above the commercial part of the property would have to represent more than 40% of the total property. Furthermore, most lenders would also insist on a separate entrance to the flat.