Commercial bridging loan LTV:how much can you borrow against commercial property?
Commercial bridging loan LTV (loan to value) is the size of the bridge expressed as a percentage of the commercial property's value, and it is the main figure that decides how much a bridging lender will advance. On a first charge over standard commercial property, LTV is commonly up to 70% to 75%, with lower limits for land, specialist assets and second charges.
The headline number is only part of the picture. Lenders measure LTV in different ways, deduct interest and fees, and treat refurbishment projects differently again. This guide explains how LTV is calculated, the difference between gross and net, how limits vary by asset type, and how additional security or a works budget changes what you can borrow.
Key takeaways
Commercial bridging loan LTV is the loan as a percentage of the RICS valuation, commonly up to 70% to 75% on a first charge for standard commercial property.
Gross LTV includes retained interest and fees; net LTV is the cash you actually receive.
Lenders often use the lower of price and value, and may size against a quicker-sale value.
Additional security can increase borrowing; works projects are also capped against GDV.
Lower LTV usually means better pricing, more lender choice and a safer exit.
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What is commercial bridging loan LTV and how is it calculated?
The formula is simple: loan amount divided by property value, multiplied by 100.
For example, a £700,000 loan against an office valued at £1,000,000 is a 70% LTV. The value is the figure in the lender's RICS valuation, not the asking price or your own estimate.
Where it gets more complicated is in two questions: which loan figure is used (gross or net), and which value is used (market value, purchase price, or a quicker-sale value). Lenders answer both differently, which is why two offers with the same headline LTV can put very different amounts in your hand. You can check your own numbers with our LTV calculator.
Gross vs net LTV: why the figures differ
Gross LTV measures the full loan, including any interest retained up front and fees added to the loan. Net LTV measures the cash actually released to you on completion. Most commercial bridging lenders quote a maximum gross LTV.
Illustrative example (round numbers)
Amount
RICS market value
£1,000,000
Gross loan at 70% LTV
£700,000
Less retained interest for the term (illustrative)
£56,000
Less arrangement fee at 2%, added to the loan
£14,000
Net loan released
£630,000
Net LTV
63%
In this example, a 70% gross loan funds 63% of value in cash. If you plan your deposit around the gross figure, you will be short. Our guide to retained vs rolled-up interest shows how each interest option changes the net amount.
Value or purchase price: which figure do lenders use?
On a purchase, many lenders calculate LTV on the lower of the purchase price and the valuation. If you buy at £800,000 and the valuer says £900,000, the loan is usually sized on £800,000.
Some lenders will lend against the higher valuation where there is a genuine reason for the discount, such as an auction purchase or a sale by a receiver. Expect them to look hard at the evidence. Our page on below market value bridging covers this in detail.
Lenders may also ask the valuer for a 90 or 180-day value, an opinion of what the property would sell for in a shorter period. On secondary or specialist property, some lenders size the loan against that figure rather than full market value. See our bridging loan valuation guide.
Have a deal in front of you?Send us the property and the numbers. We will tell you quickly whether it is fundable.
How does LTV vary by commercial property type?
The easier a property is to value and sell, the higher the LTV a lender will usually offer. As a general guide:
Security
LTV appetite
Why
Standard commercial: offices, retail, industrial
Commonly up to 70% to 75% on a first charge
Broad buyer and lender market
Mixed-use and semi-commercial
Often similar to standard commercial
Residential element can help saleability
Trading assets: hotels, pubs, care homes
Lower
Value depends on trade and operator
Land without planning
Lower
Value is uncertain and income is nil
Any second charge
Lower combined LTV
Lender ranks behind the first charge
Location, condition, lease length and tenant quality also affect appetite. An empty secondary office will attract a lower LTV than a let industrial unit on a good estate. See our property pages for office bridging loans and bridging loans for land.
Using additional security to borrow more
If the property you are buying cannot support the loan on its own, many lenders will take a charge over a second property as well. LTV is then measured across the combined value of both.
Illustrative example: you are buying a retail unit for £500,000 and own an unencumbered industrial unit worth £400,000. Combined security is £900,000. A loan of £500,000 is about 56% of the combined value, so a lender could, in principle, fund the full purchase price, with your deposit replaced by equity in the other property.
Points to weigh:
Both properties are at risk if the loan is not repaid.
Valuation and legal costs rise with each property.
An existing mortgage on the second property means a second charge, which needs consent from the first lender.
LTV on refurbishment: day-one LTV and LTGDV
Where the bridge also funds works, lenders apply two tests:
Day-one LTV: the initial advance against the current value, usually within the normal limits.
Loan to gross development value (LTGDV): the total loan, including the works funding drawn in stages, against the valuer's opinion of the value once works are complete.
Each lender sets its own LTGDV cap, and the lower of the two tests usually decides the facility. Works funding is typically released in arrears after a surveyor confirms progress.
How much a lender will fund also depends on whether the project is light or heavy refurbishment. Our guide to light vs heavy refurbishment explains the distinction.
Why a lower LTV usually means better terms
Lower leverage reduces the lender's risk, and that shows in the offer. A bridge at a modest LTV generally attracts:
Sharper pricing, because lower LTV prices better.
More lender choice, including lenders who only work at lower leverage.
Faster underwriting, with fewer conditions.
More headroom on your exit strategy, because a refinance or sale has more margin.
That last point matters. If you plan to refinance onto a commercial mortgage, the term lender will have its own LTV limit, often based on rent cover as well as value. A bridge with high LTV and rolled-up interest can leave a gap at refinance. Our guide to exit strategies covers how to plan for it.
How to estimate your own commercial bridging LTV
Start with a realistic value, ideally supported by a local agent's opinion or comparables.
Use the lower of that value and your purchase price.
Decide on interest: retained or rolled-up interest adds to the gross loan.
Add fees you will roll into the loan.
Divide the gross loan by the value to get gross LTV, and the cash released by the value to get net LTV.
Send us the figures and we will tell you which lenders on our panel suit that LTV for your property type.
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.
On a first charge over standard commercial property such as offices, shops and industrial units, LTV is commonly up to 70% to 75% of the lender's valuation. Land, trading assets like hotels and care homes, and second charges are usually lent at lower LTVs. Each lender sets its own limits by property type.
Can I borrow 100% of the purchase price?
Not against the purchased property alone, but it can be possible with additional security. If you offer a charge over another property with equity, the lender measures LTV across both. Where the combined LTV stays within its limits, the loan can cover the full purchase price.
Does the LTV include interest and fees?
Usually yes. Most lenders quote a maximum gross LTV, which includes retained or rolled-up interest and any fees added to the loan. The cash released on completion, the net loan, is lower. Always ask for both gross and net figures when comparing offers.
What happens if the valuation comes in below the purchase price?
The loan is resized on the lower figure, so you will need more deposit to complete. You can challenge the valuation with comparable evidence, renegotiate the price, offer additional security, or, at auction, find extra funds quickly. Building headroom into your budget helps.
How is LTV calculated on a second charge bridge?
Lenders look at combined LTV: the existing first charge balance plus the new second charge loan, divided by the property value. Because the second charge lender ranks behind the first, combined LTV limits are usually lower than for a first charge.
Does LTV affect the interest rate on a bridge?
Yes. Lower LTV reduces the lender's risk, so it generally prices better and opens up more lenders. Higher LTV narrows the choice and can bring stricter conditions. Property type, the strength of your exit and your experience also move pricing, and our rates page explains each of those factors.