Commercial property security assets

Although most commercial mortgage lenders require a deposit of 20% or 30%, it may be possible to get a 100% mortgage if you have additional security to offer. You will also need to show you can meet the repayments. The most likely assets that can be used as additional security are:

• Another commercial property with remaining equity
• Residential property with remaining equity
• Land with a realisable value (businesses looking to use this option should be aware that land with planning capability or consent is more valuable than undeveloped agricultural land)

Commercial bridging mortgage

If you need to provide funding for a new commercial property while waiting for the sale of your existing property to go through, you could consider a commercial bridging mortgage. This is a short-term loan which provides this necessary funding in such a way that each transaction is completed at the same time.

Applying for a commercial bridging mortgage is similar to applying for any other kind of loan, with the added bonus of being faster to arrange.

These mortgages are usually interest only, rather than capital repayment, meaning only the interest on the loan is paid each month. The proceeds from the sale of the existing commercial property are then used to clear the original lump sum of the commercial bridging mortgage.

Commercial bridging mortgages can run from one month up to three years (instead of the 25 year-period or so which is common for conventional commercial mortgages), with loan amounts typically ranging from £10,000 up to £5,000,000. A commercial bridging loan can be used for a number of things, including:

• Buying property or other assets
• Land acquisition
• Property development
• Re-finance and consolidation (whether in arrears or not)
• Business expansion
• Commercial investment property
• IVA / bankruptcy settlements
• Funding for short-term issues

It is occasionally possible for a commercial bridging to be completed on the same day the application is received, as long a valuation can be carried out quickly and all the legal documents can be signed in one go.