Commercial Bridging Loans
Commercial bridging loans are a short term financing solution used to complete commercial property transactions quickly and flexibly. These loans bridge financing gaps for commercial entities looking to invest in a new property but are unable to quickly get funding before the transaction falls through.
As with residential bridging loans, we don’t put too much emphasis on your source of income, viability of your business, or ability to pay back the loan when evaluating your loan application. We rather consider the value of the property you intend to buy, as well as the exit strategy for the commercial bridging loan.
Common exit strategies for commercial bridging loans would be a long term buy-to-let commercial mortgage. Ordinarily, that would be after you have renovated the commercial property, presumably using the bridging loan itself. You could also settle the loan via an alright sell-off after refurbishing the property.
When Should You Consider A Commercial Bridging Loan?
Commercial bridging loans are approved for the purchase of commercial properties only. If the property is semi-commercial, the loan applicant has to prove that at least 40% of the property is used for commercial properties. A good example is where the property you intend to purchase has residential units on an upper level floor and shops on the ground floor.
By their nature, commercial bridging loans have to be completed within very short time frames, usually with a few days to a couple of weeks. The reason here is most of the transactions these loans have to fund are time sensitive and delaying funding would mean the opportunity would be lost before the client can put in an offer.
Buying Disused Commercial Properties That Regular Lenders Won’t Finance
Banks are risk averse and may refuse to approve commercial mortgages for run-down properties in not-so-desirable parts of town, considering them to be risky bets. Where you are sure the property has refurbishment potential and are determined to invest, a commercial bridging loan would be an ideal way to get the financing you need.
Bridging A Funding Gap Where A Property Chain Is Broken
Such a circumstance may be where you are closing a branch in one city or part of town and opening in another. If you owned the building that housed the branch you are closing, you may want to sell it to get finance to purchase a new one where you intend to open up shop.
If for some reason you had made an offer on a new property on the confidence a buyer who had put in an offer on the old property you are spinning off and the prospective suddenly reneges on the deal, you may lose out on the new building you’re eyeing. Unless, of course, if you can bridge this funding gap with a commercial bridging loan.
Buying Commercial Property At Auction
Similarly, if you’re buying a commercial property at auction, the auctioneer would typically expect you to make the full payment within a short space of time. With the large amounts typically involved in commercial property transactions, raising the finance in time may prove challenging. A bridging loan would help close this funding gap.
Short-Term Working Capital Financing
A commercial bridging loan can also be used for other purposes other than commercial property purchases. You can use them to meet emergency financing gaps at your business, for example to cover payroll, tax payments, and any other short term cash flow gaps.
Get Approved For A Commercial Bridging Loan Today
At Galaxy Finance, we offer a wide variety of commercial bridging loan solutions that are tailor-made for different business funding needs. Contact us to discuss your needs.
We are motivated to make a positive difference to the world of bridging finance. To do this, we realise we have to think outside of the proverbial box and come up with creative and personalized solutions to our clients’ unique short term funding situations. We are prepared to upend the traditional ways banks have always lended if that is what it takes to effectively respond to our clients’ needs.
A new approach to short term finance requires a team that’s not only professional, but one that is prepared to go over and beyond their call of duty to design truly creative bridging finance solutions. Our team is drawn from professionals that trace their working experience from different industries, including finance, legal, and small business management.
A one-size-fits-all approach clearly can’t adequately respond to the often fluid nature of bridging finance. Our customers are drawn from such diverse fields as real estate, small business, to different others. A solution that works for one customer group cannot work for another, which is why we have no less than 11 different bridging finance products.