Commercial Bridging Loans If you’re a company or entity looking for funds to acquire property, then commercial bridging finance may be the best option for you.
What Are Commercial Bridge Loans?
Commercial bridging loans can help prospective commercial property buyers who need to fill a gap in financing. They’re often used when:
- You’re looking to add to your growing property portfolio
- You are buying your first commercial property
- An entity is looking to acquire funds
As with personal loans, commercial bridge loans are designed only for temporary purposes – for 12 months or less. Given that there are many options available, we know that sometimes finding the perfect deal can be overwhelming. That’s why we provide a tailored service to help you achieve the best outcome for your circumstances.
It’s worth bearing in mind that for commercial bridge loans, the overall use for the property needs to be around 40% commercial. A typical bridge loan example would be if you’re purchasing a retail unit with an apartment above it, the value of the retail unit usually needs to be more than the apartment. We’ll discuss this in more detail further into your application. We look at each case individually, accounting for your personal situation.
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Who Can Get Commercial Bridging Finance?
A commercial loan is solely used for business purposes rather than residential properties. If you’re:
- An individual
- A group (entity)
- An existing business looking to expand
You are eligible for commercial bridging finance.
In many cases, financing is typically covered by a loan from commercial mortgage lenders for every step of the process, from acquisition to construction. The main difference between commercial bridging finance and a bridging loan is that commercial loans are often made to entities as opposed to an individual, though an individual may still apply. These entities are formed for the sole purpose of acquiring commercial bridging finance. One common bridge loan example is a group of individuals with a shared interest or business partners.
The loan may be used by the entity for:
- Funding a refurbishment project
- Financing building from the ground-up
- As a bridge loan mortgage to purchase a new property
Either way, because of the nature of the entity, there is often little to no track record of credit ratings. In this case, we would require documentation from the principal or owner of the entity. The nominated individual will be responsible for information given on behalf of the group.
What Are Typical Commercial Loan Rates?
There isn’t one definitive rate from commercial mortgage lenders when it comes to loan rates. This is because the rates for business loans are not predetermined as with personal bridging loans. Therefore, the loan rates are decided through careful consideration on an individualised basis. This can be beneficial in many cases, as the loan is personalised to you.
- As a guide, commercial loans often accrue higher interest than a residential loan, but this isn’t always the case.
- A great amount of information is required to ensure we have all the documentation we need to provide you with our best rates for you.
- We will be able to guide you at each step of the way, only asking for information relevant to your loan.
What’s more, it also depends on whether you require an open or closed loan. You’ll need to ask the lender key questions to determine which one is most suited to you, such as when are open bridging loans needed? And does this apply to my situation?
We understand that not having set commercial loan rates can be frustrating. That’s why we have a development finance calculator where we’ll provide you with a bridge loan example showing how much you can borrow. If you need further help or advice, then please contact a member of our team.
Help With Your Bridge Loan Mortgage Application
Just like for residential property owners looking for funding, there is a growing list of banks that offer commercial bridge loans. However, many banks have now become more studious when it comes to bridging loans as a result of the previous over-lending. Therefore, it may be more difficult to acquire a bridging loan from your bank. That’s where we come in. As responsible commercial mortgage lenders, our team of experts will guide you through the process, finding you the best bridge loan mortgage option for your needs.
Still unsure as to whether a bridging loan is the right choice for you? Check out our FAQ’s page for more information.