A trading business that owns its premises has an asset most lenders find easy to value and most owners forget to use. When a supplier wants paying, a competitor comes up for sale, or the bank's renewal slips by a quarter, the building you already own can turn a six-month problem into a four-week one.
This post is about the commercial bridge loan UK owner-occupiers actually take: a short-term facility secured on the freehold of a warehouse, office, workshop, surgery or care home, used to fund the business rather than to build anything. If you are a developer, this is not the product for you. If you run a company from a property you own, read on.
What a commercial bridge loan UK businesses use looks like
The mechanics are simple. A lender takes a legal charge over the property and advances a proportion of its value for a fixed term, usually six to eighteen months. The loan is repaid in one go at the end, from a defined exit: a bank refinance, a sale, a tax credit receipt, an equity round or the cash the business itself generates. Interest is either paid monthly or rolled into the facility and settled at exit.
Ours run from £100k to £5m, price in the teens per annum for a clean deal, and carry no warrants or equity. Personal guarantees are not typically required; the property and a debenture over the company do that work. First contact to drawdown is two to four weeks, with the valuation and title work usually the slowest step.
Property security matters because it changes the lender's downside. A charge over a marketable building means a lender can advance more, at a lower rate, with less scrutiny of the trading numbers than an unsecured or receivables-backed facility allows. That is what makes a commercial bridge loan UK owner-occupiers can access faster and cheaper than the alternatives a business without property has to use.
Loan-to-value, first charge and second charge
On commercial property, a first charge commonly supports a loan-to-value of up to 60–70%. The exact figure depends on the type of building, how easy it would be to sell, and the strength of the exit. A specialist unit in a remote location gets a lower LTV than an industrial unit on a busy estate.
If your bank already holds a first charge, a second charge is possible but sits behind the bank in the queue. Lenders reduce the LTV accordingly and will need the first-charge lender's consent, which takes time and is not always given. If the bank's loan is small relative to the value, a second charge can still be sensible; if the bank is already at 55%, there is usually not enough left to work with.
Finstock lends to companies against commercial property and business assets. We do not lend against owner-occupied residential property, and our facilities are not FCA-regulated consumer credit. Borrowing against a building carries risk: if the loan is not repaid, the security can be enforced.
The exit matters more than the asset
New borrowers tend to lead with the building. We lead with the exit. Every bridge is a loan against a future event, and the property is what protects the lender if that event is late, not a substitute for it happening.
The way we think about it internally is the cash catalyst: the specific, dated thing that puts money in the account to repay us. A refinance offer from a term lender that needs six months of post-acquisition trading. A tax credit claim that HMRC will pay in the spring. A contract that pays on delivery. A sale that has exchanged but not completed. If you can name the catalyst and show why it is likely, the deal is fundable. If the honest answer is that the business will "work it out", the property does not change our view; it only changes what happens if you cannot.
This is also why we ask what the money is for. A bridge that funds an acquisition, a stock build or a shareholder buyout is a bridge to something. A bridge that covers losses with no plan to stop them is a slower way of losing the building.
Illustrative, round figures. An engineering business owns its unit, valued at £2m with no debt against it. It has agreed to acquire a competitor for £1.2m with completion in six weeks. The bank is willing to fund the acquisition but wants completion accounts, an integration plan and a fresh valuation, and expects to draw in four to five months.
We provide a £1.2m bridge secured by a first charge over the unit, an LTV of 60%, for a twelve-month term. At an illustrative 13% per annum with interest rolled up, the cost is about £13k a month, so roughly £65k if the bank refinances at month five and £156k if the facility runs the full year, plus an arrangement fee. The business completes on the vendor's date, keeps all of its equity, and the bank takes us out once its conditions are met.
Bridge loan versus development finance and invoice finance
Three products get confused because they all involve a lender, a business and a building. They solve different problems.
| Product | What it funds | How it draws | Repaid from | Right for |
|---|---|---|---|---|
| Commercial bridge loan | The business: acquisitions, working capital, buyouts, refinancing | Single advance at completion | A defined exit event | Owner-occupiers with property and a dated catalyst |
| Development finance | Build or conversion costs | Staged drawdowns against certified build costs | Sale or refinance of the finished scheme | Developers with a scheme and planning |
| Invoice finance | Working capital against unpaid invoices | Revolving, as invoices are raised | Customers paying their invoices | Businesses with many creditworthy debtors |
Development finance is a different product and we do not offer it. It is staged, monitored and sized against build costs. A trading business converting one floor of its office does not need it; a bridge funds that comfortably.
Invoice finance is often the right answer for a business with lots of good debtors and no property, and it is usually cheaper than a bridge. Where it fails is lumpy cash needs: it cannot fund an acquisition, and it does not help a business with few or slow customers. Those businesses, if they own their premises, are the ones a property-secured bridge suits. We look at the same question from the care operator's side in our note on bridge finance for care businesses, and from the owner's side in financing a shareholder buyout.
When to take the bank instead
If your bank will lend on workable terms in the time you have, take it. We are cheaper than equity but more expensive than a bank, and a property-backed business loan on a five-year term from a high-street lender will always cost less than our facility. The bridge earns its price in three situations: the date is fixed and the bank cannot meet it; the bank has said yes in principle but attached conditions that need months to satisfy; or the bank has said no for now and a short period of trading will change that answer.
How we structure facilities in general is on our bridge finance page, including the Smart Pension example: a £5m three-month equity bridge completed in twelve working days, which shows the pace that is possible when the catalyst is clear.
What a lender needs from you
A conversation with one of us comes first; the pack comes second. To get to terms on a property-secured bridge we will want:
- The property: address, title number, any existing charges, and any valuation you already hold
- Last two years' accounts and current management accounts for the borrowing company
- What the money is for, with the relevant documents (heads of terms, contract, buyout agreement)
- The exit: who repays us, when, and what evidence supports it (a bank indication, a term sheet, a claim schedule)
- Group structure and who owns the property, if it sits in a separate company
- Any existing lender's position and whether they will consent to a second charge
Decisions are made by Edo and me directly, so the answer comes within days of seeing this, not after a committee cycle.
If your business owns its premises and has a dated need for capital, tell one of us what the money is for and how it comes back. We will say within days whether a property-secured bridge is the right tool and roughly what it would cost.
Frequently asked questions
What loan-to-value can a business get on a commercial bridge loan?
For a first charge over commercial property, up to 60–70% of value is the usual range. The figure moves with the type of building, how readily it would sell, and the strength of the exit. Second charges behind an existing lender are lower and require that lender's consent. We size the loan to the exit as much as to the asset: a strong refinance indication supports a higher advance than a vague one.
Is a commercial bridge loan the same as development finance?
No. Development finance funds build or conversion costs through staged drawdowns against certified works, and the lender's risk is the scheme finishing on budget. A commercial bridge loan is a single advance against a property the business already owns, used to fund the business itself. Finstock provides bridges to trading companies; we do not offer development finance.
Can I get a bridge loan if my bank already has a charge on the property?
Often, through a second charge. The lender sits behind the bank, so the loan-to-value is lower and the bank must consent, which takes time and is not guaranteed. If the bank's loan is small relative to the property's value, a second charge can work well. If the bank is already at a high loan-to-value, there is usually not enough equity left for a second lender to use.
How fast can a property-secured bridge complete?
Two to four weeks from first contact to drawdown is typical. The valuation and the legal work on the title are normally the slowest parts, so having a recent valuation and clean title details ready shortens the timetable. The credit decision itself is made by the two co-founders within days of seeing the information, without a committee cycle.
Is this regulated bridging?
No. Finstock lends to corporate borrowers against commercial property and business assets. We do not lend against owner-occupied residential property, and our facilities are not FCA-regulated consumer credit. All loans are subject to credit assessment, legal documentation and due diligence. Borrowing against a building carries risk: if the loan cannot be repaid from the intended exit, the security may be enforced.