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For a Commercial Bridging Loan, the overall use of the property has to be more than 40% commercial. For example, if you were buying a retail unit with a at above it, the retail unit’s value would have to be more than 40% of the total value.
For landlords, or a landlord company, the exit strategy would usually be to refinance the loan onto a Buy-to-Let Mortgage – typically after doing some renovations to make the property suitable for rental.
For commercial units that are bought using a Commercial Bridging Loan, the exit strategy usually involves refurbishing the unit then selling it or refinancing onto a conventional Commercial Mortgage.
They can be used when you’re buying a new business, commercial property or part commercial/part residential property. In fact, they can be used for most commercial property purchases apart from house boats.
These could include brownfield sites before planning approval is given, run down commercial premises that are hard to get mortgages on in current conditions, or for funding a new small business or start-up.
Like Residential Bridging, Commercial Bridging Loans can also be useful when a property chains is broken, and at property auctions.
In fact, as long as you can provide a valid exit strategy, the money can be used for a variety of business reasons from providing your business with working capital, to financing tax liabilities or covering short term cash-flow issues.