LEADING UK BROKER FOR
Commercial Bridging Loans
At Tiger Financial, we’re a specialist commercial bridging loan broker. We connect commercial clients with a range of lenders, giving them the best chance of arranging a bridge finance loan at a competitive rate.
Here, you can learn about commercial bridging loans, including when to use a commercial bridge loan, how to arrange one, and the benefits of working with a professional broker such as Tiger Financial.
When to use a commercial bridge loan?
Commercial bridging loans provide property investors and businesses with fast and flexible access to finance to support their projects.
Unlike mortgages, bridging loans can be secured against a range of properties that traditional lenders may refuse to consider.
Bridge loans are suitable for:
- Working finance & cashflow
- Auction purchases (including buy-to-let properties)
- Derelict or uninhabitable properties that are being refurbished
- Changing property usage (creating an HMO)
- Splitting or merging a title
- Land or properties without current planning consent
- Reclassification of a property (from commercial to residential)
- To take advantage of changes in planning regulations (“permitted development rights”)
- Agricultural properties
Arranging a commercial bridging loan
Commercial bridging loans are much quicker to arrange than regulated mortgages.
At Tiger Financial, many of our clients are able to access flexible finance within 3-4 weeks.
With our support, commercial clients have been able to take advantage of exciting business opportunities, securing the finance they need with the minimum of stress.
The exact time it takes to arrange your loan is dependent on several factors, including:
- The preparedness of the legal pack
- Speed of valuation
- Any professional reports demanded by the lender
At Tiger Financial, we work proactively on your behalf to ensure the process is speedy and smooth.
We’ll monitor the deal through its lifecycle, working on your behalf to achieve a successful financing outcome. We’ve helped companies, individuals and investors to access capital to finance their purchases.
Why choose Tiger Financial for your commercial bridge loan?
Working with a specialist commercial bridging loan broker such as Tiger Financial gives you the best chance of success.
Here’s why we’re the best choice for your commercial bridging loan:
- We’re an experienced commercial bridge loan broker, with access to over 400 bridging lenders and 200 development lenders. Our market knowledge is unmatched.
- We can also call upon a network of high-net-worth private investors, family office lenders, real-estate funds and venture capital finance if needed.
- We’ll assess your application and match you with a range of lenders who may finance your purchase.
- Furthermore, we’re fast, responding to all enquiries immediately. In many cases, we can have a decision within an hour or two. Your money can be with you within 3-4 weeks.
- We’ve been providing borrowers access to finance and capital since 2004, and have a reputation for professionalism in all commercial property financing deals.
How much can I borrow?
The amount you can borrow for your bridging loan depended on several factors, including:
- The asset class you are seeking finance for.
- Location, including whether the land or property is in England and Wales, Scotland or Northern Ireland. Be aware that there are fewer options for borrowers looking to invest in Scotland and Northern Ireland.
- The credit status, experience and net asset position of the borrower. Finance providers want assurance that you can keep up repayments before lending.
- The strength of the covenant (i.e the balance sheet of the company renting the property and the quality of the lease).
- Local demand for the service, property or land you are looking to finance.
- The current status of the asset, including whether it’s in good condition or requires refurbishment, whether planning has been granted and how easy it will be to sell if the lender has to repossess it.
- How easy it will be for the borrower to exit the bridging loan through an asset sale or by arranging a commercial mortgage.
- A comparison of the mortgage amount with the current income and potential income generated from the property.
As an experienced broker, we consider all these lending criteria when discussing your options for accessing finance. Weighing up the information, we can work with you to secure the finance you need.
In general, the maximum loan-to-value (LTV) tends to be 70% of the vacant possession value for high-quality properties that are considered easy to sell.
The LTV will differ for what are considered niche assets, those that are harder to sell. Examples include land with no planning. In these cases, the LTV may be 50% LTV or even lower.
At Tiger Financial, we have access to specialist lenders who can arrange commercial bridge loans, refurbishment loans and commercial development finance from £100,000 to £100m+, across the full capital stack.
Commercial investment term loans are also available for income-producing properties above 5 Million Pounds.
How much do commercial property loans cost?
Each loan will be assessed by Tiger Financial so that we can place your commercial loan to the most appropriate lender. Our expertise is critical in giving you the best chance of borrowing the money you need.
Once submitted, each loan is individually underwritten and priced. There are no “off the shelf” rates. Instead, the cost you pay will be calculated based on the factors detailed above.
However, for good quality assets in a good location, such as a Cathedral City in the South East of England, you would expect a small short-term commercial bridge loan to start from around 0.6% per calendar month (pcm).
In addition to the monthly interest, you will need to cover additional fees, including:
- A lenders’ arrangement fee (usually 2% of the total loan value).
- In some cases, an exit fee is due (depending on the risk profile of the transaction).
- Professional fees for your solicitor and the lender’s solicitor.
- Any costs and fees associated with the transaction (including valuations/quantity surveyors/structural engineers costs).
You’ll need to make regular repayments
Like all loans and mortgages, you will need to ensure you keep up payments or your property or asset may be at risk.
Be aware that commercial bridging loans aren’t authorised and regulated by the financial conduct authority.
What else do I need to know about UK commercial bridge loans?
One common factor with all types of bridging finance is that the loan is based purely on the “property asset” value. This means the surveyor, when they visit the property to conduct the valuation, will only be looking at the bricks and mortar value of the underlying property asset, or its “vacant possession” (VP) value.
Surveyors don’t attribute any value to the revenue that the business generates, no EBITDA multiples or goodwill value.
This can often be a surprise to some property investors who are looking to acquire an operating business, which may be very profitable. For businesses with modest property assets, the amount available to borrow may be less than expected.
Another factor that can affect commercial bridging loans is the appetite of a specific lender for that particular asset class. Each lender has their own criteria that could affect your chances of securing capital or refinance
What does Tiger Financial do?
As a specialist bridging loan broker, we will take time to understand your situation and specific requirements so that we can tailor make a funding package that is right for your business.
We’ll use our knowledge of the market to match you with lenders whose criteria you fit.
We will run the financing process from beginning to end, including:
- Preparing a funding pack as required to present the best case to each lender.
- Negotiating the best terms for your commercial mortgage.
- Monitoring and managing the underwriting and credit process towards legal completion.
Our expert team will work proactively on your behalf. We will identify any problems that could affect your application, and warn you of any potential pitfalls.
At Tiger Financial, we can give you confidence that you will get the loan that your business needs, as quickly and smoothly as possible.
What types of property can I borrow against?
The term “commercial property” encompasses a wide variety of business premises, from offices and nightclubs, to care homes and churches.
Each of these commercial subcategories presents its own set of challenges, risks and opportunities.
When searching for a bridging loan, it is imperative to use the services of an experienced and specialist bridging finance broker such as Tiger Financial.
For example, many bridging lenders in England view care homes and churches with trepidation, believing that if they had to call in the loan, to do so would represent a significant reputational risk.
However, other lenders may view the market demand and stable revenue stream from both these assets as positive. It all depends on knowing which lender is right for your deal, which is where the help of an experienced broker is invaluable.
Funding is available for most asset classes in England and Wales, including:
Commercial and semi-commercial property
Hotels & B&B’s
PBSA (Student accommodation)