Commercial Bridging Loans

A commercial bridging loan could provide you with the cash you need to make a business investment.

SINCE 2004


Are you thinking about investing in a new business opportunity? Do you want to take advantage of the increased number of property renters? Or would you like to expand your current business? If you think that your current financial situation makes it impossible to do any of these things, you couldn’t be more wrong.

A commercial bridging loan could provide you with the cash you need to make a business investment. It works by providing funds to bridge the gap between the impossible and very possible, and commercial loans can prove to be very useful.

At Loan X, we provide a range of loans so you can purchase commercial property or invest in new business ideas. Bridging finance is often regarded by many as the convenient solution to build a better future, but it’s vital that you know everything about them before committing.


What is a Commercial Bridging Loan?

A commercial bridging loan exists to enable investors to buy property at auction or under hurried circumstances. You can take out commercial bridging for residential or business properties – as long as you won’t be living in them.

Taking out a traditional commercial mortgage means it will take longer to come through, and you might lose the property if you’re unable to secure it.

In many cases, investors lose their deposit if they can’t secure the funds to complete the purchase, but a commercial bridging loan comes through quickly, meaning any auction purchase can go through.

Who Can Apply For a Bridging Loan?

Both individuals and limited companies can apply for a commercial bridging loan as long as they have a strong exit strategy in place. Bridge loans serve as a stop-gap while you wait for other forms of income to become available, and they’re usually secured against a property.
Many limited companies have access to numerous buildings, so it can be easier for them to secure a commercial bridging loan than it is for individuals.

As long as you can offer lenders a form of assurance should you be unable to repay the loan, many will award the amount you need.

There are, however, some important factors that might influence the amount you receive and the terms associated with your loan.

The Loan to Value (LTV)


You can take out a commercial bridging loan for up to 75% of a properties value, which means you’ll need to finance 25% of the purchase yourself. Many providers will also set a minimum amount for a commercial loan, but the repayment terms are more reasonable than many other loans available.

Your Exit Strategy


The feasibility of your exit strategy will define how lenders value your proposition. In simple terms, the better the strategy, the higher your chances of securing a commercial bridging loan.

How you plan your exit strategy depends on how you plan to use the money. For example, you could use the sale of an investment property to repay your loan or use the profits from your business venture.

Whether you’re an individual or a company, you should always have an exit strategy in place. If not, then many lenders won’t view you as a suitable candidate.

How Much Do Commercial Bridging Loans Cost?

There are no set costs with commercial bridging loans, and each is evaluated depending on the risk factors. At Loan X, we look at the amount you’ll borrow, your exit strategy, current property value and future value.

You’ll usually find the best rate to be around 0.65% each month for commercial properties, but a semi-commercial property can offer rates as low as 0.55%.

If you have bad credit, or your venture is viewed as a risky one, then it’s likely you’ll see higher interest rates. Even then, these aren’t substantial, with most not exceeding 1.5% per month.

There are also arrangement fees to consider, usually calculated at 2% of the total loan amount.

In some cases, your home may be repossessed if you don’t meet the lending criteria set out by your loan provider. If you’re worried you might not be able to keep up repayments, then it could be worth exploring other options.

Why Choose a Commercial Bridging Loan?


A commercial bridging loan is ideal for borrowers who want to acquire more land, become buy to let investors or expand their businesses.

Land Acquisition

Purchasing land means you can take advantage of many development opportunities. While some people might use it to build a housing development, others might choose to open a new business or build offices to let out.

Buy to Let

Buy to Let incentives enable investors to get on the property ladder and generate an income each month. A commercial loan can help you purchase a property when you might not have enough accessible funds.

Business Expansion

Whether it’s a small shop or a restaurant, a successful business means there’s a lot of growth potential. It makes sense to expand to different sites, and a commercial loan enables you to secure the necessary funds.

Is a Commercial Bridging Loan Right For Your Needs?

Many people wonder whether commercial bridging loans are better than commercial mortgages, but your circumstances make all the difference when it comes to borrowing money.

While some people might find mortgages suit their needs more, others that require a quick transaction will benefit from a bridging loan.

How quick do you need the process to be?


While commercial mortgages take a long time to go through, a bridging loan can be arranged in a matter of days. For this reason, many people find they have access to better deals and can fund their development and not miss out on the opportunity.

Do you have a strong exit plan?


A strong exit plan will show lenders that you’re serious about repaying the loan and can offer them more security. Most people want to know you’ll honor the repayment agreement, so proving your financial viability is essential.

Is my provider right for my needs?


Commercial bridging loans are unregulated by the Financial Conduct Authority, so you should be confident in the credibility of your provider. Many can specify unrealistic interest rates and increase them at no notice.

It’s best to ensure that the loan provider you choose is reputable and offers some security with their commercial loans. Look on the website for guarantees, and always look to external sources such as Trust pilot for reviews.

Would You Like to Know More About Our Commercial Loans?

At Loan X, we strive to provide you with the best interest rates and funding options so you can look forward to the future. We believe that everyone can benefit from specialist advice and take advantage of new business opportunities, which is why we aim to make the lending process easy.

Please feel free to get in touch with our friendly customer service team. Our office is authorized and regulated by the Financial Conduct Authority for all residential bridge loans. While there are no regulated commercial loans, we guarantee you’ll receive 100% transparency and maximum support throughout the process.

We look forward to hearing from you.