Limited Company Bridging Loans
Tax-efficient, high-speed bridging finance tailored for SPVs, Trading Companies, and corporate property investors in the UK.
Calculate Corporate Rates →The Investor's Guide to Corporate Bridging Finance
Following the UK government's Section 24 tax changes (which heavily restricted mortgage interest tax relief for individual landlords), the property investment landscape shifted dramatically. Today, the vast majority of professional investors and developers purchase and hold their assets within a Limited Company structure to maximize tax efficiency.
Consequently, the bridging finance market has adapted. Specialist lenders now offer highly competitive, tailored bridging loans specifically for limited companies. Whether you are buying an auction property, funding a heavy refurbishment, or acquiring a commercial unit, borrowing through a corporate entity offers immense flexibility—provided you understand how lenders underwrite these applications.
Is a Limited Company Bridging Loan Regulated?
Because limited companies are distinct legal entities used solely for commercial and investment purposes, bridging loans issued to them are almost entirely unregulated. This means lenders are not bound by the FCA's strict consumer affordability checks, allowing for much faster completion times and highly flexible lending criteria.
SPVs vs. Trading Companies: What Lenders Look For
When applying for a limited company bridging loan, lenders will immediately categorize your business into one of two structures. Understanding the difference is vital for a smooth application process.
Special Purpose Vehicles (SPVs)
An SPV is a limited company set up purely to hold and manage property. Lenders absolutely love SPVs because they are "clean."
- No hidden liabilities: Because the company only holds property, there are no complex trading debts or hidden creditors to worry the lender.
- Day 1 Formations accepted: You can literally incorporate an SPV on Companies House on Monday and apply for a bridging loan on Tuesday. No trading history is required.
- Required SIC Codes: Lenders will check Companies House to ensure your SPV is registered with property-specific Standard Industrial Classification (SIC) codes, such as 68100, 68209, or 68320.
Trading Companies
A trading company generates revenue from activities other than property (e.g., an IT consultancy, a retail store, or a construction firm).
- More complex underwriting: Lenders are more cautious because if your main business fails, liquidators could seize company assets—including the property acting as security.
- Debentures required: Lenders will often require a floating charge or debenture over the entire company's assets, not just a fixed charge on the property.
- Accounts required: You will usually need to provide at least 2 years of filed accounts to prove the trading company is solvent and profitable.
The Requirement for Personal Guarantees (PGs)
A limited company is a separate legal entity, meaning the directors have limited liability. However, when borrowing hundreds of thousands of pounds through a newly formed SPV with only £100 in share capital, bridging lenders are not willing to take on 100% of the corporate risk.
To secure a limited company bridging loan, the directors (and often major shareholders) will be required to sign a Personal Guarantee (PG).
A PG legally bypasses the "limited liability" shield. It means that if the company defaults on the loan, and the sale of the property does not cover the outstanding debt (the Gross Loan), the lender can pursue the directors personally for the shortfall. Because signing a PG carries significant personal risk, lenders will insist that all directors receive Independent Legal Advice (ILA) before the loan can complete.
How Much Can a Limited Company Borrow?
Corporate bridging limits mirror the unregulated investor market. Lenders will typically advance up to 75% Gross LTV for residential investment properties and up to 65% Gross LTV for commercial properties or land.
Gross Loan Calculations
Your 75% LTV limit is calculated against the Gross Loan. This includes your Net Loan (the cash you need), the lender's 2% facility fee, and the retained interest for the term.
No Personal Income Stress Tests
Because the loan is secured against the asset's equity and the viability of your exit strategy, you do not need to prove personal PAYE income or provide salary slips.
Interest Payment Options
Most SPV investors choose to have the interest "retained" (rolled up into the loan) so there are no monthly outgoings, protecting the company's cash flow during a refurbishment.
Acceptable Exit Strategies for Limited Companies
As an unregulated commercial transaction, the underwriter's primary focus is on how the company intends to clear the debt at the end of the term (usually 12 to 24 months). Standard corporate exit strategies include:
- Refinance to an SPV Buy-to-Let Mortgage: The most common route. Once the property is refurbished and tenanted, the company takes out a standard corporate BTL mortgage to pay off the bridging loan.
- Property Sale: The company sells the asset on the open market (common in "fix and flip" or development scenarios) and repays the capital, taking the profit into the business.
- Sale of another Corporate Asset: Liquidating another property within the SPV's portfolio to clear the debt.