Business bridging loans secured on commercial property
A business bridging loan is short-term finance, secured on commercial property, that gives a trading business a lump sum now and is repaid from a specific future event such as a sale, a refinance or an expected receipt. Terms usually run from 1 to 24 months, and the lender cares far more about the property and the exit than about the last three years of accounts.
We are a broker, not a lender. We arrange bridging finance for owner-managed and trading businesses across a broad panel of bridging lenders, from specialist lenders to private credit funds. This page looks at bridging from the business owner's side of the desk: when it helps, what it costs, what lenders check and how to make sure the loan is repaid on time.
Key takeaways
A business bridging loan is short-term finance secured on commercial property and repaid from a defined event.
Lenders look at the property and the exit first, then the business and its directors.
Budget for monthly interest, an arrangement fee of around 1% to 2%, valuation, legal and any exit fee.
If the security includes a home you or your family live in, the loan may be regulated, and we introduce you to an authorised firm.
Bridging suits a one-off gap with a clear exit, not permanent working capital.
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Can a business get a bridging loan, and who is it for?
Yes. Limited companies, LLPs, partnerships and sole traders can all borrow on a bridge, provided there is suitable property to secure it against and a believable way to repay. Most commercial bridging is written to a limited company, either the trading company itself or a property-holding company in the same group.
The businesses we typically speak to fall into a few groups:
Owner-occupiers who need to buy or extend their premises faster than a bank can lend.
Growing companies with a cash flow gap between paying for stock, contracts or expansion and getting paid.
Companies with a known liability, such as a tax bill or a partner buyout, and a known source of repayment a few months away.
Businesses in transition, such as a sale process, a restructure or a move to new premises, where mainstream lenders want to wait for the dust to settle.
If your company owns its building, or a director owns commercial property, that asset can usually be used as security. For more on borrowing structures, see our guide to bridging loans for limited companies.
What can a trading business use bridging finance for?
Bridging lenders are interested in the security and the exit, so the purpose can be broader than with a bank. Common business uses include the following.
Business need
How the bridge works
Typical exit
Buying your own premises quickly
Funds the purchase while the owner-occupier mortgage is arranged
Refinance onto a commercial mortgage
Cash flow gap
Raises capital against property the business already owns
Contract payments, debtor receipts or a refinance
Tax bill or HMRC time pressure
Releases equity quickly to settle the liability
Refinance or sale of a non-core property
VAT on a property purchase
Funds the VAT element until it is recovered
VAT refund from HMRC
Partner or shareholder buyout
Funds the payment while longer-term debt is agreed
How does a business bridging loan work from enquiry to completion?
The process is the same as any commercial bridge, but business borrowers often underestimate how much the speed depends on their own paperwork.
Initial review. We look at the property, the amount, the term and the exit, then approach lenders whose appetite fits.
Terms. A lender issues indicative terms covering LTV, fees, interest method and conditions.
Valuation. An RICS surveyor values the property, usually at open market value and sometimes on a restricted sale basis.
Legal work. Your solicitor and the lender's solicitor deal with title, the charge, any guarantees and board approvals.
Completion. Funds are released, net of any retained interest and fees.
Where the property has clean title and the valuation and legal work move quickly, a bridge can complete in two to four weeks. Our guide on how long a bridging loan takes covers each stage in detail.
Have a deal in front of you?Send us the property and the numbers. We will tell you quickly whether it is fundable.
What do lenders look at before lending to a business?
Bridging lenders take a different view from a bank's credit committee. They focus on three things, in this order.
The property. Type, condition, location, tenure and how easily it would sell. Industrial and well-located retail or office space is generally easier to place than specialist trading property.
The exit strategy. How the loan will be repaid, and the evidence behind it. A refinance needs a business that can show affordability to a mortgage lender; a sale needs a realistic value and timescale.
The borrower. Company structure, directors' experience and credit history. Adverse credit is not automatically a decline, but it must be disclosed upfront.
Lenders will usually ask for company details, ID for directors and shareholders above a set threshold, a summary of assets and liabilities, and evidence of the exit. Most will want a personal guarantee from the directors. Read about personal guarantees on bridging loans before you sign one, and take independent legal advice.
How much does a business bridging loan cost?
Bridging interest is priced per month rather than per year, and it is only part of the cost. A realistic budget includes:
Monthly interest, which is lower where the LTV is lower and the property is mainstream.
Arrangement fee, typically around 1% to 2% of the loan.
Valuation fee, scaled to the size and complexity of the property.
Legal fees, for both your solicitor and the lender's.
Exit fee, charged by some lenders and not others.
Broker fee, which we always disclose before you proceed.
The way interest is handled also changes the cash you receive. With retained interest the lender holds back the interest for the term from the advance; with rolled up interest it is added to the balance; with serviced interest you pay monthly. Our retained vs rolled up interest guide explains the trade-offs, and the bridging cost calculator lets you test your own figures. Current pricing commentary is on our rates page.
Which exit strategies work for a trading business?
The exit is the most important part of any bridge. Lenders want to see that it is realistic, evidenced and achievable inside the term, with time to spare.
Exit
Evidence lenders like to see
Watch out for
Refinance to a commercial mortgage
Accounts, management figures, a broker's view on affordability
We always ask what happens if plan A is late. A second route, even a less attractive one, makes lenders more comfortable and protects you. Our guide to commercial bridging exit strategies goes deeper.
Is a business bridge regulated, and what if there is a flat involved?
A bridging loan to a business, secured on commercial or investment property and used for business purposes, is unregulated, and we arrange it directly.
The position can change if the security includes a home that the borrower or an immediate family member lives in or will live in, such as a flat above the shop. The loan may then be a regulated mortgage contract, so it goes to a firm directly authorised by the Financial Conduct Authority. We are not directly authorised by the Financial Conduct Authority, so in those cases we introduce you to a firm that is.
This often catches out owners of semi-commercial buildings. If you are unsure which side of the line you fall, our guide to regulated vs unregulated bridging explains the test.
When is a business bridging loan the wrong answer?
Bridging is a tool for a defined gap. It is the wrong choice when:
There is no clear exit, or the exit relies on trading improving.
The need is permanent working capital rather than a one-off gap.
A bank or asset finance lender can meet the timescale at lower overall cost.
The property is the business's only asset and losing it would end the business.
In those situations we will tell you, and point you to alternatives such as a term loan, a commercial mortgage, invoice finance or asset finance. Our alternatives to bridging loans guide sets out the main options.
Unregulated commercial and investment bridging is arranged directly. Any case where the security includes a home you or an immediate family member occupies, including a flat above commercial premises, may be regulated and is introduced to a firm directly authorised by the Financial Conduct Authority. We are not directly authorised by the Financial Conduct Authority ourselves. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Yes. Limited companies, LLPs, partnerships and sole traders can all use bridging finance if they have suitable property to offer as security and a credible plan to repay. Lenders focus on the property value and the exit route, so a business with thin accounts or a recent dip in trading can still be considered. Most lenders will also ask the directors for personal guarantees.
How much would a 200k bridging loan cost?
It depends on the LTV, the property, the term and how interest is handled. You would pay monthly interest for each month the loan runs, plus an arrangement fee of around 1% to 2%, which is £2,000 to £4,000 on £200,000 for example, as well as valuation and legal fees and sometimes an exit fee. Use our bridging cost calculator to model your own figures.
What does Martin Lewis say about bridging loans?
We cannot speak for Martin Lewis or MoneySavingExpert, and consumer guidance is generally aimed at homeowners rather than businesses. Our own view is practical: bridging is a short-term, relatively expensive tool that works well when there is a clear, evidenced exit and becomes costly when the exit slips. Treat it as a bridge to something specific, not as long-term borrowing.
Is a business loan 100% tax deductible?
Not necessarily. Capital repayments are not a business expense, and whether interest and fees are deductible depends on what the money is used for, how the borrowing is structured and which entity takes the loan. The treatment can differ between companies, partnerships and individuals. Take advice from your accountant before you borrow so the structure suits your tax position.
Can a startup business get a bridging loan?
Possibly, because bridging lenders lend against property rather than trading history. A new company with directors who own commercial property, or which is buying a property with a sensible deposit, can be considered. The exit must still be realistic. A refinance to a commercial mortgage is harder without accounts, so a sale or a longer-term plan may need more evidence.
Can I get a business bridging loan with bad credit?
Adverse credit such as CCJs or defaults does not automatically rule you out, as lenders weigh the property and exit more heavily than a credit score. Recent or unexplained issues will narrow the panel and can affect pricing and LTV. Disclose everything at the start, because problems found late in underwriting are a common reason for delays and withdrawn offers.
Do I need a personal guarantee for a business bridge?
Most lenders ask directors or major shareholders of a limited company borrower to give a personal guarantee. Some will accept a limited guarantee capped at a fixed amount. A guarantee means you can be personally liable if the company cannot repay, so take independent legal advice before signing and make sure you understand exactly what you are guaranteeing.
