1. What is a commercial bridging loan?
A commercial bridging loan is a short-term facility secured against commercial property for either a purchase or capital raising.
As bridging loans are intended for a short period of time, an exit strategy (how the loan is to be repaid), should be planned in advance. Most borrowers, will refinance onto a long-term commercial mortgage when repaying the bridging facility. Others, may have purchased to refurbish the property and sell on for a profit.
2. When should you offer a commercial bridge to your client?
Bridging loans can also help to develop or refurbish a property. However, it is also used by businesses to raise capital, for a variety of reasons including payment of tax bills, short term cash flow etc.. As long as your client can demonstrate a viable exit strategy, the money can be used for a variety of business purposes.
3. What is considered suitable security for a commercial bridging loan?
A commercial bridging facility can be secured against the following types of security:
- Commercial & Semi-commercial (mixed with residential)property
- Industrial property
- Land, with or without planning permission
4. Who can benefit from the flexibility of a commercial bridging loan?
From receiving an enquiry form, decisions can normally be provided within an hour, with funds being made available within a matter of days. The flexibility of a bridging loan also means the borrower can consist of any of the following:
- Private Individual
- UK limited company
- Offshore company
- Limited Liability Partnership (LLP)
- Foreign Nationals