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A commercial bridging loan is a short-term finance solution designed to “bridge the gap” between purchasing a property or funding a business and securing long-term finance or selling another asset. It is typically used for urgent business needs, such as property acquisitions, development projects, or covering cash flow shortages.
Bridge loans are designed to be quick and temporary. They provide funds for a short period (often 3-24 months) while you arrange permanent finance or complete a sale. The loan is secured against assets like commercial property, and repayments often only consist of interest during the term, with the capital paid off in full at the end.
A first charge bridging loan is when the bridging lender holds the first claim over the property or asset, whereas in a second charge bridging loan, the lender is second in line behind the primary lender. For example, if your property already has a mortgage and you take out a second loan, the mortgage lender will always be repaid first, and the bridging loan lender second.
Bridging finance for commercial property can be used for several purposes:
With commercial bridging finance, the amount you can borrow depends on the value of the asset you’re using as collateral. Typically, lenders will offer up to 70% of the property’s value. Some loans may allow borrowing up to £10 million or more, depending on the lender and the property.
Property Value | Loan-to-Value (LTV) | Amount Available |
£1 million | 60% | £600,000 |
£2 million | 70% | £1.4 million |
When applying, lenders will typically ask for:
One of the key advantages of bridging loans is their speed. Approval and funding can happen in as little as 1-3 weeks, making them a great option for businesses needing quick access to capital. However, the timeline depends on the lender, the complexity of the deal, and the required documentation.
Yes, bridging loans and commercial mortgages serve different purposes. While commercial mortgages are long-term loans (often spanning decades), bridging finance is short-term, typically lasting up to 18-24 months. Bridging loans are designed to act quickly, while commercial mortgages usually take longer to arrange.
Yes, businesses can also consider:
Get things moving, apply for a remortgage.
Free unbiased mortgage advice is just a phone call away.
A commercial bridge loan is a short-term loan that provides quick access to funds for property purchases or business needs, secured against assets such as property. It’s typically used while waiting for long-term finance.
It can take anywhere between 1-3 weeks to secure a commercial bridging loan, depending on the complexity of the case and the lender’s process.
Yes, alternatives include commercial mortgages, development finance, or invoice financing, depending on the business’s specific needs.
Most commercial bridging loans are non-regulated. This means they do not fall under strict FCA rules like residential bridging loans. Always check with your lender or broker to confirm the specifics.
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Ascot Mortgages authorised and regulated by the Financial Conduct Authority and can be found on the FCA register (www.fca.org.uk) under reference 776062. The FCA do not regulate some forms of mortgages. The guidance and advice contained in this website is subject to UK regulatory regime and is therefore restricted to consumers based in the UK. There may be a fee for mortgage advice. The precise amount will depend upon your circumstances but we estimate it will be £599 per mortgage account. Ascot Mortgages Ltd give you the option to pay a non-refundable fee of £1299 payable with the application. If this option is taken, Ascot Mortgages Ltd will refund any procuration fee received by the lender.
Ascot Mortgages Limited is registered in England and Wales and have their registered office at 8 Webster Court, Westbrook, Warrington, WA5 8WD. The company’s registration number is 06764971.
We are a credit broker, not a lender. We work with the whole of the lending market. We may receive commissions that will vary depending on the lender, product, or other permissible factors. The nature any commissions model will be confirmed to you before you proceed.
YOUR PROPERTY MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR ANY DEBT SECURED ON IT
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