Raising capital against commercial property:capital raise bridging
Commercial property capital raise bridging is a short-term loan secured on commercial property you already own, used to release cash for another purpose, such as a deposit on a new purchase, a tax bill or a business need, and repaid within months by a sale, a refinance or another known source of funds. It turns equity that is tied up in an unencumbered or lightly geared building into usable money quickly.
Most capital raises are about timing. You own an office, a shop or an industrial unit with little or no debt, an opportunity or a liability arrives faster than a commercial mortgage can be arranged, and a commercial bridging loan fills the gap. This page explains how lenders look at a capital raise, the choice between a first and second charge, and what makes the exit credible.
Key takeaways
Commercial property capital raise bridging releases equity from property you own for a purchase, tax bill or business need.
A first charge suits unencumbered property; a second charge keeps an existing mortgage in place but usually costs more.
Lenders focus on the exit because the money is spent elsewhere.
Retained interest and fees reduce the net cash you receive from the gross loan.
If the security includes a home you or your family live in, the loan may be regulated, and we introduce an FCA authorised firm.
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What can you use a commercial property capital raise for?
Bridging lenders care less about how you spend the money than about how you will repay it, but they still ask, and the purpose must be legal and for business or investment. Typical reasons we see include:
Funding a deposit or full purchase of another property, including an auction lot where completion is due in 28 days.
Paying a tax liability, such as a corporation tax or capital gains tax bill, while a sale or refinance completes.
Business needs: stock, working capital, buying out a partner or shareholder, or funding a contract before payment arrives.
Refurbishment of a different property, using equity in one asset to fund works on another.
Settling a debt or a dispute where a deadline applies.
If you are a trading business raising money for cash flow, our business bridging loans page covers that angle in more detail.
First charge or second charge: which suits your capital raise?
The charge position depends on whether the property already has a mortgage, and it affects pricing, speed and how much you can raise.
First charge capital raise
Second charge capital raise
When it applies
Property is unencumbered, or the existing loan is repaid from the bridge
Existing commercial mortgage stays in place
LTV
Commonly up to 70% to 75% for standard commercial property
Assessed on combined LTV of both loans, usually lower
Pricing
Generally lower
Generally higher, reflecting the lender's position
Consent
Not needed
First charge lender consent often required
Speed
Depends on valuation and legals
Can be slowed by waiting for first lender consent
Best for
Unencumbered property, or where the existing loan is small or expensive
Keeping a low fixed rate or avoiding early repayment charges on the mortgage
Where the existing mortgage is small, it can be simpler to repay it and take a first charge bridge for the whole amount. Where it has valuable terms or heavy early repayment charges, a second charge often makes more sense. Our second charge commercial bridging page explains consent and combined LTV in detail.
How much capital can you raise from commercial property?
The amount depends on the valuation of the property, the charge position and the lender's view of the asset. For standard commercial property on a first charge, lenders commonly go up to 70% to 75% loan to value. Specialist assets, such as hotels, pubs or care homes, and land attract lower LTVs.
For example, and purely as an illustration with round numbers: an unencumbered industrial unit valued at £800,000 might support a first charge commercial bridging loan of up to £560,000 gross. If the same unit already had a £300,000 mortgage, a second charge lender working to a lower combined LTV would offer less net cash. Remember that retained interest and fees come off the gross figure. Test your figures with the LTV calculator.
You can also raise capital across several properties, with the lender taking charges over each. This can increase the total raised or reduce the LTV on any single asset.
Have a deal in front of you?Send us the property and the numbers. We will tell you quickly whether it is fundable.
How do lenders value the property?
The lender instructs a RICS registered valuer, and you pay for the report. On a let building the valuer will look at the income, lease terms and tenant covenant as well as comparable sales. On a vacant or owner-occupied building, the valuer will report market value with vacant possession. Some lenders will consider a desktop or drive-by valuation on smaller, lower LTV deals, which can save time, but most commercial bridging still needs a full inspection.
Some lenders also ask for a 90-day or 180-day value, the price achievable in a shorter sale period, because that is what they could realistically recover. Our bridging valuation guide explains what to have ready for the valuer.
What exit strategy works for a capital raise bridge?
A capital raise is only as strong as its exit. Because the money is spent elsewhere, the lender needs confidence that a separate source will repay the loan. Common exits include:
Refinance onto a commercial mortgage on the same property, once the mortgage lender has completed its process.
Sale of the secured property, or of another asset, with evidence of marketing or agreed terms.
Proceeds from the purchase you are funding, for example the refinance of a newly bought property.
Business receipts such as a contract payment, a sale of a business or a known lump sum, supported by documents.
What does commercial bridging for a capital raise cost?
Costs follow the usual commercial bridging structure. Interest is priced per month and depends on the LTV, the charge position, the asset and your profile: a lower LTV first charge on a let industrial unit prices better than a high LTV second charge on a specialist asset. On top of interest you will usually pay:
An arrangement fee, typically around 1% to 2% of the loan.
A valuation fee and the lender's legal fees, plus your own solicitor.
Sometimes an exit fee or a broker fee, which we disclose in writing before you proceed.
Capital raise bridges are available to limited companies, SPVs, LLPs, partnerships and individuals who own commercial or semi-commercial property. Lenders usually ask directors of a borrowing company for a personal guarantee; take advice from your solicitor before signing.
Bridging secured on commercial or investment property for business purposes is unregulated, and we arrange it directly. If the security includes a home that you or an immediate family member occupy, such as a flat above your shop or a semi-commercial building you live in, the loan may be a regulated mortgage contract. We would introduce the whole case to a firm directly authorised by the Financial Conduct Authority. Using your own home as security for a business capital raise is likely to be regulated too.
How quickly can you raise capital on a commercial bridge?
A straightforward capital raise on clean, unencumbered commercial property can complete in two to four weeks where the valuation and legal work move quickly. The main delays are title problems, lease queries, waiting for first charge consent on a second charge, and slow responses to the lender's solicitor. Having your title, leases, accounts and exit evidence ready before you apply saves the most time. Our page on fast commercial bridging loans covers this in more depth.
Unregulated commercial and investment bridging is arranged directly. Any case where the security includes a home you or an immediate family member occupies, including a flat above commercial premises, may be regulated and is introduced to a firm directly authorised by the Financial Conduct Authority. We are not directly authorised by the Financial Conduct Authority ourselves. Your property may be repossessed if you do not keep up repayments on a mortgage or any other debt secured on it.
Good questions, clear answers
Capital raising on commercial property: questions answered
Can I raise capital on commercial property I own outright?
Yes. Unencumbered commercial property is the simplest security for a capital raise, because the bridging lender takes a first charge and there is no existing lender's consent to obtain. The amount depends on the valuation and the asset type, with standard commercial property commonly supporting up to 70% to 75% loan to value.
Do I need my existing lender's permission for a second charge?
Usually yes. Most commercial mortgages require the first charge lender to consent before another lender takes a charge, and some refuse. Waiting for consent is a common cause of delay. If consent is unlikely, refinancing the existing loan with a first charge bridge may be quicker.
Can I use a capital raise bridge to pay a tax bill?
Yes, lenders accept tax liabilities as a purpose, provided the exit is credible, such as a sale or a commercial mortgage. We cannot advise on the tax itself, so take advice from your accountant on the liability and timing before you borrow against it.
Can I raise capital against several properties at once?
Yes. A lender can take charges over a portfolio of commercial properties, which may increase the total raised or lower the LTV on each asset. Valuation and legal work increase with each property, so allow more time and budget for costs.
Is a capital raise bridge better than a commercial mortgage?
It depends on timing. A commercial mortgage is cheaper over the long term but takes longer to arrange and needs income or trading evidence. A bridge is faster and more flexible but costs more per month. Many borrowers bridge first and refinance onto a commercial mortgage once the purpose is complete.
Can a semi-commercial property be used for a capital raise?
Yes. Semi-commercial and mixed-use buildings are common security. If you or a close family member live in the residential part, the loan may be regulated, so we would introduce you to a firm directly authorised by the Financial Conduct Authority. If the flats are let to third parties, it is usually unregulated.
