Commercial Bridging Loans: Rates, Uses, and How to Get One

What Is a Commercial Bridging Loan?

A commercial bridging loan is short-term finance secured against commercial, semi-commercial, or mixed-use property.

It works the same way as a residential bridge — interest rolls up, the loan redeems in full at term end — but the security is a shop, office, warehouse, or hotel rather than a home.

Commercial bridges are almost always unregulated. They fall outside the FCA’s MCOB rules, which means the lender can move faster, offer higher LTVs on strong assets, and apply more flexible underwriting — but you lose the FCA protections that apply to regulated residential bridging.

We found most commercial bridges complete in two to three weeks on clean transactions, faster than a commercial term mortgage, which typically takes six to ten weeks. For auction purchases of commercial property — where you have 28 days to complete — that speed is the entire value proposition.

Commercial vs Residential Bridging Loans

The legal framework is different. Residential bridging on owner-occupied property is regulated under MCOB — you have FCA protection, access to the Financial Ombudsman, and the lender must treat you fairly. Commercial bridging is unregulated. Enforcement is faster and the lender’s obligations to you are significantly reduced.

The underwriting criteria are different. Commercial lenders focus heavily on asset quality — location, condition, tenancy status, and secondary market appeal — rather than your personal income.

An empty shop in a declining high street is a harder lend than a fully let office in a major city, even at the same LTV.

Rates are typically 0.05% to 0.25%/month higher on commercial assets versus equivalent residential bridges. We found that the premium reflects both enforcement risk — commercial vacant possession is harder than residential — and the secondary liquidity risk on the asset itself.

What Can Commercial Bridging Finance Be Used For?

Auction purchases are the clearest use case. If you’re buying commercial property at auction, you have 28 days to complete. No mainstream commercial mortgage moves in 28 days. A commercial bridge funds the purchase; your term finance replaces it once you’ve had time to arrange it.

Permitted development conversions are another strong fit. If you’re converting an office or retail unit to residential under permitted development rights, the property is unmortgageable during construction.

A bridge funds the purchase and refurbishment. Your exit is refinancing onto a buy-to-let or development exit mortgage once the units meet residential criteria.

We also see commercial bridges used for vacant possession gaps — when a sitting tenant exits and you want to refurbish before selling or refinancing at a higher value. And for commercial remortgages where existing term finance is due to expire faster than a new term deal can be arranged.

Commercial Bridging Loan Rates and Fees in 2026

Rates start from 0.57%/month at United Trust Bank and 0.60%/month at LendInvest for strong commercial assets at moderate LTVs. Glenhawk starts from 0.61%/month and accepts mixed-use and semi-commercial. Funding 365 starts from 0.64%/month flat rate with no exit fees.

Commercial LTV maximums are typically 65–70% of open market value on straightforward assets. Semi-commercial (part-residential, part-commercial) may attract lower LTV caps. Vacant, dilapidated, or secondary location assets will be assessed at lower LTVs with higher rates.

The all-in cost on a commercial bridge is meaningful. A £500,000 bridge at 0.70%/month for nine months costs £31,500 in interest. Add 1.5% arrangement (£7,500), legal fees (£3,000–£5,000), and valuation (£1,500–£3,000).

Total cost: £43,000–£47,000 before exit fee — around 8.6%–9.4% of the loan. That is significant, but frequently justified by the transaction it enables.

How to Compare Commercial Bridging Lenders

When comparing commercial bridging lenders, filter on five criteria: maximum LTV on your specific asset type, accepted asset classes (some lenders exclude hotels, pubs, or petrol stations), minimum loan size, speed, and exit fee structure.

Glenhawk and MT Finance both explicitly accept a wider range of commercial and semi-commercial assets than institutional lenders. If your asset is unusual — a petrol station, a working pub, a former bank branch — you need a lender with manual underwriting, not one relying on automated valuation tools.

We recommend using a specialist broker for commercial bridging. Commercial lenders vary significantly in appetite, and the difference between a 0.65%/month and a 0.90%/month quote on the same asset often comes down to which underwriter you reach and how the deal is packaged.

Asset-Class Pricing: How Industrial, Retail, Hotel and Mixed-Use Compare on Rate

We see commercial bridging rates vary by 0.20% to 0.40% per month across asset classes. Lenders price the secondary liquidity risk — how easily the asset would sell if you defaulted. This affects your headline rate before any borrower factors apply.

Industrial property — warehouses, light manufacturing, distribution sheds — prices best in 2026. Strong tenant demand, simple valuation, and clean enforcement routes mean rates start from 0.57% per month on prime stock. We find this is the cheapest commercial bridge available.

Retail is more variable. A let unit on a major high street prices similarly to industrial. A vacant unit on a secondary parade can attract a 0.20% per month premium. We find your specific location and tenant covenant matter as much as the property class itself.

Hotels and licensed property are specialist territory. Most generalist lenders won’t quote them. Specialist hotel-bridging lenders price from 0.85% per month with tighter LTV caps. We find the trading history of your hotel matters more to underwriters than the bricks-and-mortar valuation.

Mixed-use property — typically a flat above a shop or office — sits between residential and commercial pricing. We find Glenhawk and MT Finance regularly accept these at 0.65% to 0.85% per month. The split between residential and commercial floor area drives your rate.

Lender Appetite by Commercial Asset Type

Lender willingness to lend on commercial property varies enormously by asset type. We map below the realistic shortlist for each major asset class — knowing this before you apply saves you from chasing lenders who would never have quoted on your case.

For office and retail, the panel is broad: United Trust Bank, LendInvest, Glenhawk, Funding 365, MT Finance and Octopus all quote regularly. We find competitive tension keeps rates down and gives you genuine negotiating leverage at offer stage.

For industrial and warehouse, United Trust Bank and LendInvest lead on price for prime stock. Glenhawk and Octopus compete on secondary industrial. We find smaller industrial lots — under £500,000 — are harder to place because the work-to-fee ratio doesn’t suit institutional lenders.

For pubs, hotels, restaurants and licensed premises, your panel narrows sharply. We find Glenhawk and a small group of specialist trading-property lenders will quote. Generalist commercial bridgers either decline outright or price punitively against the trading risk on your asset.

For care homes, petrol stations and other operational specialist assets, you need a sector-experienced lender. We recommend going to broker first — these deals rarely fit a price comparison and pricing reflects the underwriter’s appetite on the day of application.

Permitted Development Bridging: Funding Office-to-Residential Conversions

Permitted development rights let you convert offices, retail units and certain agricultural buildings to residential without full planning permission. We find this is one of the strongest fit cases for commercial bridging — the property is unmortgageable until conversion completes.

Your typical structure: a commercial bridge funds the purchase and the works. Term is 9 to 15 months. Your exit is a buy-to-let mortgage on the completed flats, a sale to an investor, or a portfolio refinance once the units are tenanted at scale.

LTV on day one is typically 65% to 70% of purchase price, with a separate works pot funded against expected GDV. We find lenders cap total exposure at 70% of your forecast end-value to keep a margin against build-cost overruns during construction.

Permitted development consent must be confirmed in writing before drawdown. Prior approval applications can take eight weeks at the local authority — we recommend resolving the consent before applying for finance, not after. Lenders won’t fund conversions where the consent is uncertain.

We see the strongest conversion lenders include LendInvest, Octopus, Together and several specialist developer-funders. They understand the build phase, will release funds against milestones, and typically have an in-house exit team to help you transition cleanly to term finance.

Commercial Bridging Exit Pathways: Refinance vs Sale

Your exit determines almost everything about your bridge: rate, LTV, term length, and the lender’s willingness to fund. We find commercial bridges typically exit one of two ways — refinance onto a commercial term mortgage, or sale of the asset.

A commercial term mortgage refinance is the higher-confidence exit. Your bridging lender wants written evidence: a decision in principle from a commercial term lender, an indicative term sheet, or broker confirmation that your case fits a known panel. We find vague commitments are not accepted.

A sale exit is acceptable but priced more cautiously. Lenders look at the asking price, the marketing strategy, and the level of buyer interest already secured. We find a sale exit on a vacant commercial unit is the most scrutinised pathway in commercial bridging.

Tenanting before refinance is the strongest exit story. A bridge that funds purchase and refurbishment, with the exit being a refinance against the tenanted asset at higher value, can stretch lenders to higher day-one LTVs. We find this is the developer’s classic playbook.

We recommend you build buffer into your exit timeline. A 12-month bridge with the exit planned for month 8 gives you four months of slippage room before extension fees and default interest start. Commercial term refinances frequently overrun their indicated timelines on completion.

Tenanted vs Vacant Commercial Property: How Bridging Loan Pricing Differs

Tenancy status is the single biggest commercial-specific pricing factor we see in market. A tenanted asset prices materially differently from a vacant one — and your bridging loan terms reflect that gap directly.

A fully let commercial asset with a strong tenant covenant typically attracts 65% to 70% LTV at the lender’s headline rate. The rental income provides interest cover and reduces enforcement risk if the loan defaults at term end.

Vacant commercial property drops your LTV ceiling to 55% to 65% in most cases. We find the rate uplift is typically 0.10% to 0.20% per month above the tenanted equivalent — a meaningful figure on a six-figure bridge over 9 to 12 months.

Partially let property — say, three of five units occupied — is assessed unit-by-unit. Lenders consider both the rental income from the let units and the realistic prospects for filling the vacant ones. We find honest tenant-pipeline evidence beats optimistic projections every time.

When you take vacant possession deliberately — for example, exiting a tenant before sale to maximise value — flag this upfront with your broker. We recommend timing your bridge to start once vacant possession is confirmed, not before. Lenders price differently against a confirmed vacant asset.

Commercial Bridging Loan FAQs