What is a commercial bridging loan?
A commercial bridging loan is short-term finance, usually running for up to 12 to 24 months, secured against commercial or semi-commercial property. It exists to solve problems that a standard term mortgage cannot: moving fast on a purchase, buying a property that is not yet mortgageable, or bridging a gap between two transactions. It is always repaid from a defined exit — typically a refinance onto a term mortgage or a sale.
Where a commercial mortgage is long-term finance held for years, a bridge is a temporary tool used to get a deal done and then replaced. Understanding when each fits is essential, and our guide on commercial mortgage versus bridging goes deeper on the choice.
When should you use a commercial bridge?
Bridging earns its higher cost in specific situations:
- Speed — an auction purchase or a time-sensitive deal that a term mortgage cannot complete in time.
- Unmortgageable property — a unit that is vacant, dilapidated or lacks a valid use, which needs work before a lender will offer a term loan.
- Repositioning — buying a poorly let or empty asset, improving or re-letting it, then refinancing at a higher value.
- Chain or timing gaps — bridging the period between buying one property and selling or refinancing another.
- Business transition — funding a purchase while trading history or accounts are being established.
How do commercial bridging loans work?
A bridge is secured against the property, usually up to around 70% to 75% loan-to-value, sometimes lower for specialist assets. Interest is often rolled up — added to the balance rather than paid monthly — so the borrower has no monthly payments during the term. The full amount, principal plus rolled-up interest, is repaid on exit.
Because the term is short, pricing is quoted monthly rather than annually, with an arrangement fee on top. The cost is higher than a term mortgage, but you only carry it for months, not years, which is the trade-off.
Why the exit matters most
Every bridging lender's first question is: how will this be repaid? A bridge without a credible exit is a bridge to nowhere. The two standard exits are:
- Refinance — moving onto a term commercial mortgage once the property is mortgageable or trading is proven.
- Sale — selling the asset, often after improvement.
Lenders want the exit to be realistic and evidenced. A vague plan to "sell or refinance eventually" will not do; a clear route with supporting figures will.
How fast can a commercial bridge complete?
Speed is the main reason people use bridging. A well-prepared bridge can complete in days to a few weeks, compared with the weeks or months a term mortgage can take. Clean legal title, a clear exit and a well-packaged case all speed things up. This is why bridging dominates auction purchases, where completion is required within a tight window.
How do you arrange a commercial bridge efficiently?
Bridging rewards preparation, because the lender must be confident in both the security and the exit quickly. Assesr builds a lender-ready credit paper from your figures in around 60 seconds and matches it to specialist lenders active in commercial bridging. You pay a 0.5% Assesr Fee on drawdown — a quarter of the typical broker fee — with nothing until completion.
Frequently asked questions
What is a commercial bridging loan?
A short-term loan, usually up to 12 to 24 months, secured against commercial property. It is used for speed, transition or to buy property that is not yet mortgageable, and is repaid from a defined exit such as a refinance onto a term mortgage or a sale.
How much do commercial bridging loans cost?
Rates are higher than a term mortgage because the loan is short-term, and pricing is typically quoted monthly with an arrangement fee on top. The overall cost depends on the loan-to-value, the asset and the strength of the exit, but you only carry it for months rather than years.
How quickly can a commercial bridge complete?
Often within days to a few weeks, far faster than a term mortgage, which is a large part of the appeal. A clear, evidenced exit and clean legal title speed things up considerably, which is why bridging is the standard route for auction purchases.