What a commercial bridging loan is for
A commercial bridging loan is short-term finance secured on property that is not, or not only, a home: shops, offices, industrial units, land, or mixed-use buildings such as a shop with a flat above, often called semi-commercial. Investors and businesses use it to buy at auction, complete before a commercial mortgage is ready, refurbish a building so it can be let or sold, or raise money quickly against property they already own.
These loans normally run for about 1 to 18 months and are repaid from a sale or a refinance onto a longer-term commercial mortgage. Because the security is commercial property, most UK commercial bridging is unregulated business lending rather than a regulated mortgage.
Typical UK commercial bridging terms
Commercial bridging is usually quoted as a monthly rate. Broker data for 2024 to 2026 puts first-charge commercial and semi-commercial loans at roughly 0.75% to 1.25% a month, higher than prime residential bridging, and lower rates are generally reserved for lower loan-to-value or larger loans. Every quote is individual, so enter the rate you have been offered.
Lenders usually cap commercial bridging at around 60% to 70% of the property's value, compared with up to 75% or more on residential property. At a 65% limit, borrowing £500,000 needs security worth at least £769,230.77. Arrangement fees are commonly 1% to 2% of the loan, some lenders add an exit fee of around 0.5% to 1%, and you also pay valuation, legal and often broker fees.
How the interest can be paid
Serviced means you pay the interest every month and repay only the loan at the end. Deferred simple means simple interest is added up and repaid at the end without interest on interest. Monthly compound means unpaid interest is added to the debt each month and itself attracts interest. Retained means the lender deducts the interest for the whole term from the loan at the start, so the gross loan must be larger to leave you the cash you need.
Commercial lenders often offer retained or rolled-up interest because the property may not produce income during the loan. Check which method your facility letter uses: the same rate and term can cost noticeably more when interest is retained or compounded.
Worked example: £500,000 for 12 months
An investor needs £500,000 for 12 months at 0.95% a month, with a 2% arrangement fee paid at the start and no exit fee. With simple interest repaid at the end, interest is £500,000 × 0.95% × 12 = £57,000. Adding the £10,000 arrangement fee gives a total cost of borrowing of £67,000, and £557,000 to repay at the end.
If the lender retains the interest instead, the gross loan must be £564,334.09 so that £500,000 remains after deducting 12 months of interest. Interest is then charged on the larger gross loan and comes to £64,334.09, making the total cost £74,334.09 with the same fee.
Plan the exit before you borrow
A commercial bridge is only as safe as its exit. If you plan to refinance, check that a commercial mortgage lender will lend enough on the property's value and income once the bridge ends. If you plan to sell, allow for the time a commercial sale can take. Extending a bridging loan usually means more interest and often new fees.
This calculator estimates the cost of a quote. It does not assess eligibility, the property's value, VAT on the purchase or Stamp Duty Land Tax at non-residential rates. Take independent advice and read the facility letter before committing.
To check the monthly payments on a refinance after the bridge, use the commercial mortgage calculator .
For a bridge secured on a home or residential investment property, use the UK bridging finance calculator .
Use the right country page
This page stays in pounds and uses UK terms: a monthly rate, an arrangement fee and commercial bridging. The country choices above the inputs open separate local pages. Choosing United States opens the US commercial bridge loan calculator, which uses an annual rate and origination points. The inputs reset and amounts are not converted.
Inputs for the commercial bridging loan calculator
Amount you need
The cash you need to receive. If interest is retained or a fee is deducted, the calculator works out the larger gross loan.
Quoted interest rate
The rate in your quote, not the APR. UK commercial bridging is usually quoted per month, for example 0.95%.
Rate quoted per
Month for a monthly rate. Year (nominal) divides an annual rate by twelve; Year (effective) converts an annual effective rate.
Term
The number of months you expect to keep the loan, in whole months.
How interest is paid
Serviced, deferred simple, monthly compound or retained. Use the method in your facility letter.
Arrangement fee
A percentage charged for setting up the loan, often 1% to 2%.
Exit fee
A percentage some lenders charge when you repay. Enter zero if there is none.
Percentage fees based on
Whether the fee percentages apply to the cash you receive or to the larger gross loan.
Arrangement fee payment
Paid separately at the start, or deducted from the loan, which increases the gross loan.
Other quoted costs
Valuation, legal and broker fees you pay separately. Commercial loans almost always need a full valuation.
CALCULATOR QUESTIONS
UK commercial bridging loan calculator questions
How much does a commercial bridging loan cost?
Interest at the monthly rate for each month you keep the loan, plus the arrangement fee, any exit fee and valuation, legal and broker costs. Enter them from your quote to see the total cost of borrowing.
How much can I borrow on commercial property?
Lenders typically lend up to around 60% to 70% of a commercial property's value, less than on residential property. Some go higher with extra security.
What is semi-commercial property?
A mixed-use building with both commercial and residential parts, such as a shop with a flat above. Lenders usually price it with commercial bridging.
Is commercial bridging regulated?
Usually not. Loans to businesses and investors secured on commercial property are generally unregulated. A loan secured on a home you or your family live in can be regulated.
What happens when I change country?
The United States option opens the separate US commercial bridge loan page, in dollars, with its own defaults and terms. Your inputs are reset rather than converted.