Bridging loans are available for all kinds of commercial property in more or less the same way as for residential properties. There are many reasons where bridging loans for commercial property can be suitable.
Examples of commercial bridging loan use:
• Purchase where change of use is required. A retail company wanted to buy a town centre property formerly used as offices. A commercial bridging loan was used to secure the purchase and after change of use was obtained, a commercial remortgage was arranged to refinance the bridging loan 3 months after purchase.
• Purchase of fire damaged property. An industrial unit had suffered minor fire damage just before it was repossessed. A commercial bridging loan was arranged for a company to purchase the property from the Receivers and this allowed time for repairs to take place, prior to a remortgage to a commercial lender.
• Purchase of development site with lapsed planning permission. A property developer wanted to buy a brown-field site, but the planning permission had lapsed. Commercial bridging financed was agreed and the site was purchased. The property developer was successful in having the planning permission renewed and development funding was arranged to pay off the bridging loan after 14 weeks.
• Purchase where renovation is required. A hotelier saw an opportunity to acquire another hotel in the town, but it was in need of renovation. Commercial lenders refused to lend until it had been brought up to a good standard. A commercial bridging loan was arranged to purchase the property and following full renovation and new fixtures and fittings the commercial mortgage lender agreed to lend 70% of the total cost of purchase and renovations.
• Capital raising to avoid Liquidation. A company had not filed their annual return to HMRC in time and, after a few months, the company received a demand for an estimated corporation tax liability far in excess of what was actually owed. The business premises was personally owned by the director and he only had a small mortgage secured on it. Facing a winding-up order from HMRC, a commercial bridging loan was arranged on the business premises to pay the estimated corporation tax bill. Shortly after this, the accounts were submitted showing a relatively small profit. The company received a substantial refund from HMRC, plus interest, and the bridging loan was repaid.
To discuss your circumstances and requirements, contact us on 0117 223 2050 and speak direct to an adviser.