Discover answers to frequently asked questions about commercial bridging loans.
We offer loans from £25,000 up to £60 million. However, the amount you can borrow typically depends on the value of the property, its condition, location and desirability, your creditworthiness, and the lender's criteria.
Generally, lenders offer between 60-75% (LTV) of the property’s value as the loan amount, though some may offer more.
For example, if the property is valued at £1 million and the lender offers a 75% Loan-to-Value (LTV) ratio, you would be eligible for a loan of £750,000. This arrangement allows the borrower to access three-quarters of the property's value in financing.
Repayment typically occurs either through the sale of the property or refinancing with a longer-term loan. The exit strategy should be clearly defined before taking out the loan.
The Loan-to-Value ratio (LTV) in a bridging loan is the percentage of a property's value that a lender is willing to finance.
For example, if the LTV is 75%, the lender will provide a loan covering 75% of the property's value, and you’ll need to cover the remaining 25% either through cash or equity. A higher LTV means you can borrow more against the property, but it also means the lender has a larger share tied to the loan.
Criteria may vary from lender to lender; however, borrowers typically need to meet the following basic requirements:
Bridging loans are usually processed much faster than traditional loans. Depending on the lender and the complexity of the application, approval and funding can be completed within days to a few weeks.
Commercial bridging loan costs can vary based on the lender and the specific loan terms. Due to their short-term nature and fast accessibility, bridging loans tend to be more expensive than traditional financing options. However, they can be arranged quickly, offering a significantly faster alternative to the lengthy process of obtaining other types of funding.
Typical fees include:
Interest rates are typically between 0.5% to 2% per month. Rates are usually higher than standard loans, often charged monthly rather than annually.
A setup fee, generally 1-2% of the loan amount, is charged by the lender to process the loan.
Covers the cost of a property valuation required by the lender.
Both the borrower and lender’s legal fees may be covered by the borrower.
Sometimes charged when the loan is repaid, often around 1% of the loan.
Additional fees for loan management or specific processing steps that may apply.
Want to see how much your loan could cost? Use our free commercial bridging loan calculator for an instant estimate.
Yes, you can get a commercial bridging loan with bad credit, although it may make securing the loan more challenging. However, having a strong credit score can enhance your application and increase your chances of getting better loan terms.
Residential and commercial bridging loans differ mainly in property type and purpose.
Used for properties intended for residential use, such as houses, apartments, or other dwellings. These loans are typically used by homeowners or property investors purchasing or renovating a residential property.
Used for commercial properties, such as office buildings, retail spaces, warehouses, and other business-use properties. These loans are typically taken out by businesses, developers, or investors for business or investment purposes.
Bridging loans used for investment properties, buy-to-lets, or commercial properties are not currently regulated by the Financial Conduct Authority (FCA). As a result, all commercial bridging loans are considered unregulated.
Open and closed bridging loans differ mainly in their repayment terms and exit strategies.
Open bridging finance has no fixed repayment date ,and the borrower has no defined exit strategy in place. These are generally more expensive than closed bridge loans.
Closed bridging finance has a fixed repayment date, and the borrower has a defined exit strategy in place. These are generally cheaper than open bridge loans.
At SME Bridging Finance, you can apply for a commercial bridging loan by completing a quick online form. We offer same-day decisions in principle, and you’ll gain access to a comparison of over 50 lenders to find the best terms for your needs.