Bridging loan for limited company borrowers: how it works

)}

Can a limited company get a bridging loan?

Yes. Lenders are used to lending to companies, and for commercial property it is the norm rather than the exception. A company can use bridging finance to:

• buy an office, retail, industrial or mixed-use building quickly, including at auction;
• buy land before or after planning permission is granted;
• refurbish or convert a building before refinancing or sale;
• buy its own trading premises, then move onto a longer-term mortgage (see bridging to buy business premises);
• raise capital against property it already owns, on a first or second charge;
• fund the VAT on a purchase while waiting for a refund.

The lender's main focus is the same as for any bridge: the property, the loan to value and a credible exit within the term, commonly 6 to 18 months.

Which company structures do bridging lenders accept?

Structure	How lenders view it	Points to note
UK SPV limited company	Widely accepted and often preferred	Clean history, single purpose; directors usually guarantee
UK trading company	Accepted	Lender reviews accounts and existing debts; other creditors may rank alongside
LLP	Accepted by many lenders	Members treated much like directors for checks and guarantees
Overseas company	Accepted by a narrower group of lenders	Extra due diligence on ownership, local legal opinions, longer timescales
Group or holding structure	Accepted with full ownership mapping	Lender needs to see every layer up to the individuals in control

Trusts, pension schemes and charities can also borrow in some circumstances, but each has its own rules on borrowing and security. Take specialist legal and accountancy advice before using one of these structures.

SPV or trading company: which is better for a bridge?

Neither is right in every case, but lenders see them differently.

• SPV: a newly formed company whose only activity is holding the property. Lenders like it because there are no hidden liabilities, no trading losses and no other creditors. The trade off is that the SPV has no trading record, so lenders lean more on the directors' experience and guarantees.
• Trading company: an established business that owns or is buying property. It may have accounts showing income that can support serviced interest, but lenders will look at all its liabilities, and a weak year can complicate the application.

Where you intend to refinance onto a commercial investment mortgage later, many term lenders also prefer an SPV. Whether an SPV makes sense for tax purposes is a question for your accountant, not your broker.

What makes a company eligible for a bridging loan?

Eligibility is driven by the property and the exit more than the company's age. A lender will typically want:

• Security it can value and sell, with enough equity to sit within its LTV limit.
• A clear exit strategy, such as a sale, a refinance or a contracted payment.
• Details of every director and significant shareholder, with identity and address checks.
• The credit history of the company and the people behind it, with any adverse disclosed up front.
• Company documents: certificate of incorporation, articles, the register of people with significant control and recent filings at Companies House.
• A board resolution authorising the borrowing and the security.
• For trading companies, recent accounts and management information.

Our application checklist sets out the full document list, and having it ready shortens the timeline considerably.

Will directors need to give a personal guarantee?

In most cases, yes. Lenders usually ask directors or the main shareholders of a company borrower to give a personal guarantee, so that if the company cannot repay and the property sale falls short, the lender can pursue the guarantors for the shortfall. Guarantees are almost universal for SPVs, because the company has no other assets.

Guarantees can be limited to a fixed amount or unlimited, and some lenders require each guarantor to take independent legal advice before signing. Read our guide to personal guarantees on bridging loans before you agree to give one, and take advice from your own solicitor.

How is the security taken on a company bridging loan?

The core security is a legal charge over the property, registered at HM Land Registry. With a company borrower, there are some extra layers:

• Companies House registration: a charge created by a UK company should be registered at Companies House within 21 days of creation, or it may be void against a liquidator or administrator. The lender's solicitor normally handles this.
• Debenture: some lenders take a fixed and floating charge over the company's other assets, especially for SPVs.
• Share charge: on some deals, the lender also takes security over the shares in the SPV.
• Guarantees: personal or corporate guarantees, as above.

Your solicitor will explain what each document means for you and the company. Legal costs are usually higher than for a simple individual borrower because there is more paperwork.

What about tax, regulation and overseas companies?

Tax: buying property in a company affects Stamp Duty Land Tax, corporation tax, how interest costs are treated and how profits are extracted. These points depend entirely on your circumstances, so take advice from your accountant before choosing a structure. We do not give tax advice.

Regulation: the FCA's regulated mortgage contract definition applies to loans to individuals or trustees, so bridging to a company on commercial property is unregulated and we arrange it directly. If a director or their family will live in any part of the security, tell us at the start; see regulated vs unregulated bridging.

Overseas companies: lenders that accept them usually need full ownership details, certified documents and sometimes a legal opinion from the company's home jurisdiction, so allow extra time.

How does bridging compare with other types of business loan?

A company has several ways to borrow, and bridging is only right for some situations. For context:

• Commercial mortgages: longer term and usually cheaper, but slower and stricter on the property.
• Unsecured business loans: based on trading performance, usually smaller sums.
• Asset and invoice finance: secured on equipment or receivables rather than property.
• Government-backed schemes: such as the pandemic-era loans, which were designed to support trading businesses and have closed to new lending.
• Bridging finance: short-term, property-secured, quick to arrange and designed to be repaid from a defined exit.

Our business bridging loans page looks at bridging from a trading company's point of view.

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.