A commercial bridging loan is short-term finance secured on property that a company uses to complete a purchase before longer-term money arrives. The lender values the property, lends a share of what it is worth, charges interest by the month, and you repay the whole loan in one go through an exit – usually a sale or a refinance. It is quick, and it is expensive for the time you hold it.

We don't offer bridging loans, and we don't lend against property. If your deal needs a bridge, you need a bridging lender, and it's better to read that in the second paragraph than the last one. What's worth knowing before you call one is that a bridge is priced by the month and repaid out of a single future event, so almost everything that goes wrong with one is a problem of timing rather than of price.

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How a commercial bridging loan works

Four things happen, in this order. The lender values the property, lends a share of what it is worth, charges you interest for each month you hold the money, and gets repaid in full when your exit completes. Everything else about bridging follows from those four.

1. The lender values the property. That can be the property you're buying, one your company already owns, or both together.
2. It lends a share of that value. The share is the loan-to-value, or LTV. You fund the rest, from your own cash or from other borrowing.
3. Interest is charged by the month. You can usually pay it monthly, add it to the loan, or have the lender hold some of the loan back to cover it.
4. You repay the whole loan through your exit. Normally a sale, a refinance onto longer-term lending, or money your company is contractually due.

Because a charge over property is what makes the lending work, a bridge is a type of secured business loan. That shapes the whole process: the valuation and the legal work set the timetable, and the two questions a lender asks hardest are what the property is worth and how you're getting out.

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Open and closed bridges

A closed bridge has a fixed repayment date, which suits you if you already know when the money is coming – contracts exchanged on a sale, or a mortgage offer in hand. An open bridge has no fixed date and suits a borrower who is waiting on a sale or an approval that hasn't landed yet. You still have to repay inside the term. Closed bridges usually cost less, because the lender is carrying less uncertainty.

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First charge and second charge

A first-charge lender has the primary claim on the property if it has to be sold to clear debts. A second-charge lender sits behind an existing mortgage, so it is paid only after the first lender, and it will usually want the first lender's consent before it lends at all. Second charges cost more for the same reason closed bridges cost less.

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What businesses use commercial bridging loans for

Bridging is a tool for a deadline. It exists because property transactions have completion dates and mainstream lending has timetables, and the two don't always line up.

Two situations come up again and again. In the first, a company has found the premises it wants but hasn't sold the ones it is leaving. A bridge funds the purchase so the move goes ahead, and the proceeds of the old sale repay it. In the second, a company is buying another business, property is part of the deal, and the long-term funding or investor money is still clearing. A bridge completes the purchase before the seller runs out of patience or another buyer appears.

Beyond those, bridging turns up at auctions, where completion deadlines are measured in weeks, and on buildings that need work before any mainstream lender will touch them – refurbish first, refinance onto a commercial mortgage afterwards. That last case is bridging's real speciality: it can fund property with problems a mortgage lender won't lend against, which is exactly why it costs what it does.

If you're building or converting rather than buying, property development loans are usually the better fit. They release money in stages as the work is signed off, rather than in one lump at the start, so you pay for what you've drawn rather than for the whole scheme from day one.

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What a commercial bridging loan costs

Bridging is quoted by the month, and that is the single most important thing to know about its price, because a monthly rate looks small next to an annual one. Four lenders publish at least part of their terms. The gaps below tell you as much as the figures do: most of them won't put a rate or an LTV in public at all.

Every figure above comes from the lender's own product page, checked on 20 October 2026: Shawbrook, Together, West One and the Cambridge & Counties Bank criteria list. They move, and the rate you're offered depends on the property, the LTV and your company.

Two warnings about reading that table. Together's 0.94% is printed without a period beside it, so we can't tell you whether it is monthly or annual, and we're not going to assume. And Cambridge & Counties' 70% is its commercial tier, not its ceiling: the same list offers up to 80% on residential and on mixed-use where residential floor space is above 51%. A headline LTV almost always belongs to a property class, so check which one yours is in before you plan around the number.

For the rates nobody publishes, a solicitors' guide to commercial bridging put typical monthly interest at 0.45% to 2%. Its own byline dates it to September 2024, so treat it as a sense of the spread rather than today's price, and get your own quote.

Convert whatever you're quoted before you compare it with anything else. At 0.69% a month, compounded, you're paying about 8.6% a year. At 2% a month you're paying about 26.8%. Those are different products wearing similar-looking numbers.

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How the interest is paid

You can usually choose, and the choice changes what you need in the bank each month rather than what the loan costs overall.

• Serviced. You pay the interest every month, like any other loan.
• Rolled up. The interest is added to the loan and settled in full at the end.
• Retained. The lender holds back part of the loan at the outset to cover the interest, so you draw less than you borrow.

Rolled-up and retained interest both mean you pay nothing monthly, which is why they suit a company whose exit is a lump sum. They also mean the debt grows while you hold it, so a delay costs more than it first looks.

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What £200,000 costs for a year

Take a £200,000 bridge held for 12 months, with interest at 1% a month. The amount and the rate are round numbers for illustration, not a quote, but the shape of the bill is real.

That's 14% of what you borrowed, for a year's use of it. The 2% arrangement fee is the figure Together publishes; the solicitors' guide puts arrangement fees across the market at 1% to 3%. Some lenders also charge an exit fee, often around 1%, usually when you repay early – West One says it has none – which would add another £2,000 here. On top of all of it sit the valuation fee, your legal costs and usually the lender's too, and a broker's fee if you use one. Nobody publishes figures for those, because they depend on the property.

The number worth running, though, is the delay. If your exit slips by three months, that is another £6,000 of interest on this loan, plus whatever an extension costs. Ask every lender for the total amount repayable on your timetable, and then for the same figure on a timetable that runs a quarter late. The gap between the two tells you more about the risk you're taking than the headline rate does.

Interest on company borrowing affects your tax position, and how it's treated depends on what you're buying and why, so put the figures in front of your accountant before you commit.

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Your exit, and what happens if it slips

The exit is the part of your application a lender tests hardest, and it's the part that goes wrong. You repay a bridge in one payment, so the whole loan rests on one future event happening roughly on time.

If you plan to refinance, work out whether a mortgage lender would accept the property and your company's accounts now, not after the refurbishment. Some bridging lenders offer a bridge-to-term option that moves you onto their own longer-term lending when the bridge matures, which removes a second valuation and a second set of legal fees – Cambridge & Counties publishes one. It still depends on that lender approving the term loan when you get there.

When an exit slips, three things happen at once. Interest keeps accruing, so the debt you have to clear is bigger than the one you planned for. Extending the term brings new fees, and the lender is negotiating from a strong position. And if you can't repay, the lender can take the property and sell it, which is the risk you accepted when you gave it a charge. Directors are commonly asked for a personal guarantee on top, so a shortfall after a sale can follow you personally.

None of that makes bridging a bad product. It makes it a product that needs an exit with slack in it. Plan for the sale taking a quarter longer than your agent says, and if the numbers only work on the fastest timetable, they don't work.

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Commercial or residential: the 40% rule, and what it means for your company

Whether a bridge is regulated comes down to who borrows and what the land is used for, and both conditions have to be met. Under article 61 of the Regulated Activities Order, a contract is a regulated mortgage contract only where the lender provides credit 'to an individual or to trustees' and 'at least 40% of that land is used, or is intended to be used … as or in connection with a dwelling'. Because both have to be true, credit to a limited company sits outside article 61 whatever the building is used for. That is worth knowing, because it means the consumer mortgage protections don't apply to your loan: you are negotiating as a business, and the contract is what you've got.

Separately, and confusingly, lenders run their own test to decide which product you qualify for. West One, for instance, says that for a commercial bridging loan 'the overall use of the property has to be more than 40% commercial' – a shop with a flat above it would need the shop to be worth more than the flat. The number is similar and the rule is not: one is a statutory test about dwelling use that only applies to individuals and trustees, the other is one lender's eligibility criterion for one of its products. Ask any lender which of its products your building falls into, and don't assume the answer from the statute.

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What lenders check before they lend

Commercial bridging is mostly written by specialist lenders and challenger banks. Some high street banks still offer it, usually on stricter criteria and a slower timetable, and commercial finance brokers place a lot of it. A broker can see more of the market than you can and may reach lenders who only deal with intermediaries, but ask how they're paid and get the fee in writing before they start.

Lenders look at the property and your exit first, then at the company behind them. Expect to provide:

• Details of the property, including its use, its value and any existing charge over it.
• Your exit, with evidence – an agreed sale, a mortgage offer in principle, or a signed contract for the money you're waiting on.
• Company accounts and recent bank statements.
• Company and director details, including who owns the business.
• A personal guarantee from one or more directors, with most lenders.

Speed is bridging's whole proposition, and it is real, but it is set by the valuation and the conveyancing rather than by the lender's appetite. West One puts a commercial bridge at anywhere between three days and three weeks. Having the valuation instructed, your solicitor briefed and your exit evidenced is what gets you to the short end of that.

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When a bridging loan isn't what you need

A bridge is the right answer to one narrow question: how do I complete a property transaction before the money I'm relying on arrives? If that isn't your question, something cheaper almost certainly fits better.

That last row is the one most often mistaken for a bridge. A bridging lender prices against a property and repays out of an event, so if your gap is simply that money goes out before it comes in, there is nothing there for it to lend against. If a VAT or corporation tax bill is due before your cash comes in, a Flexi-Loan lets you pay it on time and repay early for free once your sales catch up. It's a business loan with flexible repayment options, unsecured, so there's no property to value and no charge over it – though every new Flexi-Loan needs a personal guarantee from at least one director, so it isn't free of risk to you, and we lend to UK limited companies. If that sounds more like your situation than a property deal, see how short-term business loans work.