Commercial Bridging Loans: Rates, LTV and How They Actually Work

Bridging finance secured against commercial property plays by slightly different rules to residential bridging, different LTV caps, different regulation, and, in some ways, more flexibility, not less. Let’s go through exactly how it works and what it costs in 2026.

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What is a commercial bridging loan?

Short-term finance secured against property used for business purposes, shops, offices, warehouses, industrial units, pubs, care homes, rather than a residential home. It works on the same basic principle as any bridging loan, borrow for a short term against the asset, repay through a clear exit, but the property type changes how lenders assess risk, value, and speed of resale.

What rate can you expect?

Commercial bridging rates currently run 0.75% to 1.5% per month, with most transactable cases falling between 0.85% and 1.25%. The strongest cases, conservative LTV, a tenanted position, a clean, evidenced exit strategy, can access rates from around 0.75%. That’s a touch higher than the sharpest residential bridging rates, reflecting the fact that commercial property generally takes longer to value reliably and longer to sell if a lender ever needed to.

What LTV can you actually borrow?

Generally lower than residential bridging. Fully commercial property is usually capped around 65-70% LTV, while semi-commercial or mixed-use property, where there’s a genuine residential element, a flat above a shop, for instance, can sometimes reach 70- 75% LTV, since the residential portion is typically easier to value and resell than a purely commercial asset.

My top tip: if your security has any residential component at all, flag it clearly and early. It can genuinely change both the LTV you’re offered and the rate, since lenders view mixed-use assets more favourably than fully commercial ones, all else being equal.

Is a commercial bridging loan FCA regulated?

Generally, no. Because the purpose is business-related rather than securing the borrower’s own home, commercial bridging typically sits outside FCA regulation. This isn’t just a technicality, it’s actually part of why commercial bridging is so useful: it means lenders can accept things a regulated mortgage lender simply couldn’t, non-standard construction, poor property condition, vacant buildings, short leases, or a property requiring major works. The unregulated status gives lenders room to say yes to situations that would otherwise be a flat decline.

What is a commercial bridging loan actually used for?

Common scenarios include:

• Refurbishment projects, funding the purchase and works on a commercial property before refinancing onto a term loan at the improved value
• Chain breaks, where a commercial purchase is at risk because another sale hasn’t completed yet
• Change of use schemes, buying commercial property to convert, an office into residential flats, for example, with the exit being sale or refinance once complete
• Capital raises, releasing equity from an existing commercial property for business purposes
• Vacant property purchases, where the building doesn’t yet meet the income criteria a standard commercial mortgage would require
• Bridging to a sale, where cash is needed now while a property is actively being marketed

Why would you pay a bridging premium instead of just waiting for a commercial mortgage?

Because speed itself has real value. A commercial mortgage can take 8-12 weeks to arrange, requiring extensive trading history and income analysis. Commercial bridging, underwritten primarily on the asset’s value and your exit strategy rather than lengthy income analysis, can complete in as little as 5-14 days. Holding a bridge for a few months often costs less in absolute terms than the delay, and the lost opportunity, of waiting for a commercial mortgage to work through its full underwriting process, particularly for a time-sensitive purchase or a property that isn’t currently mortgageable at all.

A worked example

Say you’re bridging £300,000 against a commercial property valued at £460,000 (roughly 65% LTV), at a rate of 0.95% per month, over an expected 6-month term. That’s £2,850 a month in interest, £17,100 across the six months, plus arrangement and legal fees on top. If refinancing onto a commercial mortgage would have taken 10-12 weeks longer, and you’d have lost the purchase, or a valuable rental opportunity, waiting for it, the bridging cost is often the cheaper outcome overall, even though the monthly rate looks steep in isolation.

Semi-commercial vs fully commercial: does the difference really matter?

Yes, genuinely. Lenders assess the split between the commercial and residential elements, the income each part generates, and how easily the whole property could be resold. A property that’s mostly residential with a small commercial element, a shop with a flat above, say, is often treated more generously than a fully commercial building with no residential component at all. The right lender is one who understands the specific asset properly, rather than forcing it into a box it doesn’t quite fit.

What should you check before committing to a commercial bridging loan?

• The full cost across your expected term, not just the headline monthly rate, arrangement fees, valuation, legal costs, and any exit fee all add up
• How the lender treats any residential element in your security, since this can materially change your LTV and rate
• Your exit strategy’s credibility, since this is one of the biggest factors in both approval and pricing

Can I get a commercial bridging loan on a property needing significant refurbishment?

Yes, this is one of the most common uses, funding the purchase and works before refinancing onto a standard commercial mortgage once the property is improved and income-generating.

The bottom line

Commercial bridging loans typically cost 0.75-1.5% per month and cap at lower LTVs than residential bridging, but that premium buys genuine flexibility, speed, and the ability to fund properties a standard commercial mortgage lender simply wouldn’t touch. Flag any residential element in your security clearly, compare total cost across your realistic term rather than the headline rate alone, and make sure your exit strategy is credible before you apply, that’s what actually determines both your approval and your price.