Commercial Bridging Loans

Commercial bridging loans can provide the capital to purchase commercial property or land and can be available for a whole range of business finance requirements. A commercial bridging loan can be on the basis of a 1st, 2nd or even 3rd charge and be for any purpose, which means it can be the perfect solution to a financial crisis.

Commercial bridging finance is not limited to purchasing industrial property. There are several other uses that the commercial bridging loan can be put to such as:

  • Funding stock purchases
  • Expanding or relocating premises
  • company restructuring
  • Avoiding bankruptcy.
  • A commercial bridging loan is flexible enough to accommodate most circumstances.

After you have put in all the hard work to secure a great deal on a commercial property or business acquisition it would be a great shame to lose the opportunity due to a lack of funds.  A commercial bridging loan can fill the gap between your available cash and any shortfall.

If you are a business and planning the purchase of a factory, office or other property for commercial purpose, then it is likely that you may need some additional finance.  Before you consider selling an asset to raise capital you should consider commercial bridging finance as an option.  Selling commercial property can take a long time, be expensive and could even jeopardise your purchase.  Using a commercial bridging loan can enable your business to move forward and seize opportunities.

Commercial Bridging loans to Purchase Property:

In relationship to the purchase of commercial property, a Commercial bridging loan is designed to fill the gap between the sale of an existing property and purchase of a new one.  The borrowed amount is normally used to either buy the new property outright or to act as a deposit.  One of the main benefits of a commercial bridging loan is speed in which it can be arranged.

Using a commercial bridging loan the entrepreneur or business owner can quickly arrange finance for any purpose.  Due to its short-term nature a commercial bridging loan will not require the client to be tied in to a long term commitment.

In fact using a commercial bridging loan can buy a company time to make suitable arrangements for the best long term funding solution.  The initial commercial bridging loan is usually replaced by a long term loan, which due to the sums of money involved may take a long time to arrange.  Due to its short-term nature, commercial bridging finance has the added benefit of having little impact on long-term financing plans.

Applying for a commercial bridging loan:

Applying for commercial bridging finance is very similar to applying for any other type of loan.  The main difference is the time it takes to arrange.  It is not unusual for a commercial bridging finance application to be completed within a week, so long as a valuation can be arranged quickly and that the solicitors are able to complete their work in time.

Due to the short-term and often urgent nature of commercial bridging finance, a detailed credit history or accounting background is not usually required.  This non-status approach can help businesses who need cash urgently to avoid a cash-flow crisis.  A commercial bridging loan can be secured on almost any type of property.

Commercial bridging finance is usually repaid on an interest only basis, rather than capital repayment, with the loan being cleared on the sale or refinance of a property.

As commercial bridging loans are normally only arranged for a short period of time the interest rate can appear higher than long term borrowing.  Although this means that commercial bridging loans can appear expensive at first glance it is worth bearing in mind that the cost is a short-term one.  The expenses should be weighed against the consequences of not taking out the finance.  However it is always worth shopping around for the best deal.

Because commercial bridging finance is normally required quickly there is little margin for error.  For this reason it makes good sense to use the services of a commercial finance broker.  Even though this may involve paying a broker fee, the benefits of having the assistance and guidance of an experienced professional should out weigh the costs.