Commercial bridging loans

A commercial bridging loan is a short-term loan secured against commercial, semi-commercial, or investment property, designed to be repaid within months rather than years. A commercial mortgage is long-term debt, typically repaid over 5 to 25 years. The key practical differences are speed and eligibility: bridging can complete in weeks and lenders will consider vacant, refurbishment, and transitional property that a mortgage lender would not.

The most common use of commercial bridging is as a stepping stone to a commercial mortgage: acquire on bridging, stabilise or refurbish the property, then refinance once it meets mortgage criteria. The guide to commercial bridging vs commercial mortgages covers the comparison in full.

Loan amounts are primarily determined by the value of the security property and the LTV the lender will advance. For standard commercial assets in good condition with a clear exit, lenders typically consider up to 65 to 70 percent LTV. Properties that are vacant, require significant work, or are in non-standard use tend to attract lower limits. These are illustrative ranges only.

There is no standard minimum or maximum loan size. Some lenders focus on larger transactions from £500,000 upwards; others have active books below £250,000. A specialist broker will identify which part of the market suits your loan size and property type. The bridging cost calculator lets you model different combinations.

Yes. Most commercial bridging lenders are comfortable lending to limited companies and special purpose vehicles. This is the standard structure for property investors who hold assets in a corporate wrapper. Lenders will ask for company incorporation documents, director details and identification, and in most cases personal guarantees from directors or significant shareholders.

Newly incorporated companies are considered by many lenders, though the personal guarantee requirement is almost universal. The guide to bridging loans for limited companies and SPVs covers the differences in detail.

On a straightforward case, commercial bridging loans typically complete within two to four weeks of full application submission. The main variables are the valuation (commercial valuers are less available than residential, and some property types require specialist valuers), the legal process (commercial titles can carry more complexity), and document preparation.

Auction purchases operating under a 28-day completion deadline are achievable with good preparation, but require all three workstreams to begin simultaneously. The SME document preparation guide covers exactly what to have ready.

In almost all cases, commercial bridging loans are unregulated. The FCA regulatory framework applies to loans secured against property occupied as a main residence. Commercial and investment property does not meet that test. This means the specific conduct rules and consumer protections that apply to regulated residential bridging do not apply here.

Unregulated does not mean unprotected. Lenders and brokers are still subject to general commercial law and their own regulatory permissions. However, the formal complaint pathway to the Financial Ombudsman Service is not available. The guide to regulated vs unregulated bridging explains the distinction fully.

If the exit takes longer than the agreed term, interest continues to accrue on the outstanding balance. Most lenders charge a default rate above the contractual rate once the term expires. The two main options are requesting a formal extension from your existing lender or refinancing onto a new bridging product from a different lender.

Both options become harder and more expensive if arrears have already developed. Engaging with your broker or lender well before the term expires is critical. The guide to extensions vs refinancing covers both options in detail.

Yes, and semi-commercial bridging is a common use case. A mixed-use property, typically a retail or office unit on the ground floor with residential flats above, falls between residential and commercial classification. How a lender treats it depends on the commercial percentage of the total floor area.

The exit needs to accommodate the mixed-use nature of the property. Not all mortgage lenders will refinance a mixed-use building, so confirming the exit is accessible before proceeding is particularly important. The guide to semi-commercial and mixed-use bridging explains how classification works.

Yes. VAT bridging is a specific product for commercial purchases where the seller has opted to tax the property. The buyer must pay 20 percent VAT on the purchase price at completion. VAT bridging covers this liability and is repaid when HMRC processes the reclaim, typically within four to twelve weeks.

A Transfer of a Going Concern (TOGC) may remove the VAT liability entirely where applicable. The guide to VAT bridging loans explains the product, TOGC conditions, and documentation needed.