What is a commercial bridging loan?
A commercial bridging loan is short-term secured finance for non-residential property — offices, retail units, warehouses, mixed-use buildings, and land with commercial potential. Like residential bridging, it's designed for speed when standard commercial mortgages are too slow.
Commercial bridges are unregulated by the FCA (unless the property is a dwelling), which means lenders have more flexibility but borrowers have fewer protections.
When to use commercial bridging
- Auction purchases: Commercial property bought at auction with 28-day completion deadlines
- Refurbishment or conversion: Renovating commercial premises or converting to residential
- Speed-critical purchases: Securing a property before a competitor
- Bridging to commercial mortgage: Buying quickly then refinancing
- VAT funding: Bridging the VAT payment on commercial property until reclaimed from HMRC
💡 If buying commercial property at auction, remember that VAT may be payable on top of the purchase price. Ensure your bridging facility covers this if needed.
Rates and LTV
Commercial bridging rates typically range from 0.55–1.5% per month, slightly higher than residential bridging. Maximum LTV is usually 65–70% of the property's open market value.
Arrangement fees of 1.5–2% are standard, and legal costs tend to be higher than residential due to the complexity of commercial conveyancing.
Key requirements
Commercial bridging lenders will assess the property type (some sectors are considered higher risk), the borrower's experience, the exit strategy, and the overall financial position.
Unlike residential bridging, commercial bridges may require a personal guarantee from the borrower or company directors, meaning personal assets could be at risk if the loan defaults.
⚠️ Commercial bridging loans are unregulated, so you don't have the same FCA protections as with residential bridging. Read the terms carefully and get independent legal advice.
Getting commercial bridging finance
A specialist commercial finance broker can navigate the more complex world of commercial bridging and find competitive terms. Get matched with a bridging specialist through Nesto.