Commercial bridging loans
A commercial bridging loan is short-term finance secured on non-residential or mixed-use property — shops, offices, industrial units, some leisure assets, or a shop with flats above. It is typically unregulated business lending. Maximum LTVs are usually lower than on residential bridging because commercial property can take longer to sell, and the exit is often a commercial mortgage once let.
Last reviewed: 4 October 2026
BridgingLoans.online is an independent UK introducer operated by PASECOM GROUP LTD (company 17139327, ICO ZC117546). We do not lend and we do not advise. Nothing on this page is a quote, an MCOB illustration or an offer of credit.
Why use a bridge for commercial property?
A commercial mortgage can take months to arrange and usually needs income: a tenant, a lease and accounts. Many commercial opportunities do not fit that. A vacant unit, an auction lot with a short deadline, a building that needs work, or a property where a tenant has just left all fall outside mainstream criteria. A bridge can buy time to let, refurbish, change the use or sell, and then be repaid by a longer-term loan or a sale.
What property types are considered?
| Type | Examples | Underwriting points |
|---|---|---|
| Retail | High-street shops, parades | Location, vacancy, alternative uses |
| Office | Town-centre and business-park offices | Demand, condition, conversion potential |
| Industrial | Warehouses, workshops, trade units | Condition, access, environmental issues |
| Mixed-use (semi-commercial) | Shop with flats above | Split of income; often between residential and commercial lending |
| Leisure and hospitality | Pubs, hotels, care-related property | Value tied to trading; more specialist |
How much can be borrowed?
Gross caps around 60% to 65% of value are often discussed on commercial bridging, sometimes higher on strong mixed-use and lower on specialist or trading assets. Valuers may report an open-market value and a restricted-period value that assumes a quicker sale; some lenders work from the more cautious figure. Leisure and hospitality valuations can depend heavily on trading performance.
Worked example: a vacant commercial unit
Suppose an investor buys a vacant commercial building valued at £600,000 and needs £360,000 for 12 months while re-letting it, using this site’s teaching defaults.
| Line | Amount |
|---|---|
| Commercial property value | £600,000 |
| Net funds needed | £360,000 |
| Arrangement fee (2% of net, added to the loan) | £7,200 |
| Interest base (net + fee) | £367,200 |
| Monthly interest at 0.85% | £3,121.20 |
| Total interest (12 months, simple retained) | £37,454.40 |
| Gross facility | £404,654.40 |
| Net LTV | 60.0% |
| Gross LTV | 67.4% |
| Total cost of credit (fee + interest) | £44,654.40 |
Indicative educational example using this site’s calculator method: fee = net × 2%; interest = (net + fee) × 0.85% × months; gross = net + fee + interest. The 0.85% a month and 2% fee are teaching defaults, not our rates and not a quote. Valuation, legal and broker costs are not included.
A gross LTV of 67.4% would sit at or above many commercial lenders’ caps, so this case would likely need more cash, a shorter term or additional security. Cutting the term to nine months, for example, reduces retained interest by £9,363.60. The planned exit — a commercial mortgage once let — has to repay the gross balance plus costs, and depends on the lease terms and tenant achieved. Try variations in the calculator.
How does valuation work on commercial property?
Commercial valuers look at the rent the property achieves or could achieve, the lease terms, the condition and comparable sales. A vacant building may be valued on what it would let for, less the time and cost of letting it. Some lenders also ask for a value assuming a sale within a restricted period, which is usually lower. The figure the lender uses sets the loan size, so it is worth understanding before you commit to a purchase.
Retained interest suits empty buildings and properties under works, because there is no income to pay interest from. Serviced interest can suit a tenanted building whose rent covers the payments, and keeps the gross loan lower. Lenders will want to see the lease and the rent if you propose to service. See retained vs serviced vs rolled-up interest.
Which exits work?
- Refinance onto a commercial mortgage once the property is let on acceptable terms.
- Sale after letting, refurbishment or a change of use.
- Sale of another business asset, if evidenced.
- Conversion to residential and sale or refinance — see heavy refurbishment.
A commercial refinance depends on the tenant, lease length and the borrower’s accounts, so lenders test it carefully. Read exit strategies.
What documents help a commercial case?
- Any existing or proposed leases, with rent, length and break clauses.
- Business accounts if the borrower is a trading company or owner-occupier.
- A schedule of works and costs if the property needs refurbishment or conversion.
- Planning documents for any change of use.
- A letting agent’s or commercial agent’s view of rent and demand.
Individuals, partnerships, trading companies and SPVs can all borrow on commercial bridging. Directors are usually asked for personal guarantees. Owner-occupying businesses buying their own premises are common too. See limited company bridging loans and capital raising if you want to release equity from premises you already own.
Is this regulated or unregulated bridging?
Occupancy is the legal dividing line. If you or a close family member live in, or will live in, the property as a home (the usual test is at least 40% of it), the loan is likely to be a regulated mortgage contract, with affordability checks, consumer protections and usually a maximum 12-month term. BridgingLoans.online is an introducer, not an FCA-authorised broker and not a lender: where occupancy is yes, we pass a complete pack to an FCA-regulated broker, who explains the protections that apply. Investment, commercial, vacant buy-to-let, land and many company or SPV files are often unregulated. Either way the figures here are indicative only and this is not advice or a product recommendation. See regulated bridging and unregulated bridging.
Your home or property may be repossessed if you do not keep up repayments on a mortgage or other debt secured on it.
Indicative estimate only. Not a quote, illustration under MCOB, or offer of credit. BridgingLoans.online is a trading name of PASECOM GROUP LTD (company 17139327, ICO ZC117546), an introducer, not a lender. Email hello@bridgingloans.online.
Last reviewed: 4 October 2026.
FAQs
What is a commercial bridging loan?
Short-term finance secured on non-residential or mixed-use property, typically used while a property is let, refurbished, converted or sold. It is usually unregulated business lending.
What LTV is typical on commercial bridging?
Gross caps around 60% to 65% are often discussed, sometimes higher on strong mixed-use and lower on specialist assets. The lender may work from a cautious restricted-period valuation.
Can I raise working capital on a commercial building?
Sometimes. That is a capital-raising use of the same market and still needs an evidenced exit.
What is semi-commercial property?
A mix of commercial and residential, such as a shop with a flat above. Underwriting often sits between residential and commercial lending.
Can a limited company or SPV apply?
Yes. Personal guarantees from directors are still common.
Is a commercial bridge regulated?
Usually not, but if anyone in your family will live in a residential part of a mixed-use building, ask the broker how it will be classified.
Next step
Use the calculator for an indicative starting point, then enquire if you want an introduction.