Commercial Bridging

Commercial bridging finance can be used on typical commercial properties including offices, retail units, industrial, leisure or healthcare buildings.

What exactly is a commercial bridging loan?

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.

When would you use a commercial bridging loan?

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.

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FAQs

What is a commercial bridging loan?

Commercial bridging loans are, as their name implies, bridging loans that are secured against commercial property.

How can businesses use a commercial bridging loan?

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.

Can commercial bridging loans be secured against semi-commercial property?

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.

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