What is bridging finance?
A commercial bridging loan in many ways is similar to a residential bridge loan, usually used by commercial ventures or businesses when short term financing is required to buy or develop a commercial property or venture.
Many clients require fast commercial bridging loans that are needed to further finance individual projects or to refinance an existing project.
When using to finance a property clients need to understand that commercial bridging should only be used on property deals where the property itself is 40% or more commercial use. Many commercial properties will have a commercial use (retail space or office space) on the ground floor with residential flat or flats above, the overall use must be 40% or more commercial space.
In the same way property valuations should reflect more than 40% of the total property value to be in excess of the total property valuation.
Property companies and private landlords will often use commercial bridging to acquire the property and start the renovation process, the aim is usually to convert the finance into a buy to let mortgage once renovations achieve a property that is suitable for rental, the property then becomes mortgageable.
If the property is a totally commercial property then the aim would be to use a commercial bridge deal to buy the property with the aim of either refurbishing and selling the property on or changing to a commercial mortgage once refurbishment has commenced.
What Are The Circumstances Where Commercial Bridging Is Required?
There are many instances where commercial bridging finance may be needed, such as: funding business start ups, buying an existing business, commercial property acquisitions and expansion, Land developments that requires planning to become mortgageable, in fact consider commercial bridge financing for any commercial needs where short term financing is required.
These are especially suited to situations where the commercial property is dilapidated and therefore difficult to mortgage in it's current state of repair, or commercial properties that are a part of a broken chain where urgent financing is required to progress.
In a similar manner to residential bridging loans, a commercial bridge deal can be used as auction finance for property development to make the property saleable and or mortgageable.
With a commercial bridging loan like any other bridging finance loan a valid exit strategy needs to be in place to qualify, the finance could be used for a capital injection, short term cash flow issues (major client project where the business cannot finance the deal internally) right up to paying tax bills and any other working capital needs.
What Else Do I Need To Know About Commercial Bridging Finance?
Minimum loan value of £30,000.00
Can be used for financing terms of 1 month to 18 months
Can be used as a first charge or second charge mortgage
We have arranged commercial bridging in as little as 3 days, however it can take up to 3 weeks so allow a reasonable lead in period.
We do not charge for early repayment of commercial bridge loans
Like other bridging finance interest can be rolled into the loan and paid on exit.
The benefits of using commercial bridging loans for businesses and professionals.
If you find it difficult to get bank of high street finance then commercial bridging would be a good way to go.
If you have an offshore or channel islands business or a limited company, or perhaps you are not a UK national then you will find that we can finance you whereas the banks usually will not.
If you need business finance fast then again a commercial bridge could be a good way to go.
If you are concerned about hidden fees then there is no need, we are completely transparent and there will never be any hidden fees with Bridge Finance Direct.
Commercial bridging finance is very flexible and can be used for a wide selection of business or commercial requirements.
One thing to remember is that commercial bridge finance is qualified on the property value, not the purchase price so valuations may be required and could be better than the purchase price.
To find out more about our commercial bridging loans please feel free to contact us, you will find us very helpful, friendly and extremely knowledgeable in all property finance and property development subjects, and we don't charge for help and advice.
Bridge Finance Direct Commercial Bridging Loans Contact Us Today or drop into our Office for a coffee and friendly help and advice with your project.
Bridge Finance Direct 3 Bluecoats Ave, Hertford SG14 1PB, UK 01992 568820 or Call Free on 0800 954 3765 We are open 8AM–8PM