Commercial Bridging Loan Oxford

What is bridge-to-let and when does it make sense?

Commercial bridge-to-let is a two-stage facility. The first stage, the bridge, funds acquisition of a commercial property that is not immediately fundable on a long-term mortgage: vacant, partly tenanted, mid-refurbishment, or with an unsigned lease at point of purchase. The second stage, the term-out, refinances the bridge onto a standard commercial investment mortgage once the asset is income-producing and the ICR test passes.

Bridges typically run 12 to 24 months, with interest serviced monthly or rolled-up into the loan balance (useful where the asset is not income-producing during the bridge period). Bridge LTV up to 70% of current value, sometimes higher with refurb-funded value where lenders consider GDV (gross development value). Bridge interest rate currently 0.75 to 1.10% pm, equivalent to 8.5 to 11.0% pa: meaningfully more expensive than long-term debt, but the right answer for a 12-month value-add play where no term lender will engage on the day-one position.

The agreed exit onto term debt is the underwriting comfort. Specialist lenders like LendInvest and Shawbrook either provide both legs (bridge then term with the same lender, on a pre-agreed product transfer) or partner with a sister term lender. InterBay Commercial takes selected larger Oxford cases on the bridging side. We model the all-in cost across the bridge period plus term-out so you see the true total cost of the strategy before drawdown.

Most commercial bridge-to-let is taken out by a limited company SPV with director personal guarantee, and is unregulated commercial lending. The exception: where the bridge is secured against a property with a residential element that the borrower will personally occupy, the deal can fall under FCA-regulated bridging rules and routes to a regulated bridging lender. Stamp duty land tax applies on the day-one purchase at standard commercial rates; it is paid by the buyer at completion of the bridge, not at term-out (because term-out is a refinance, not a fresh purchase). That timing matters for cash-flow planning on the deal. Indicative case seed: a central Oxford listed-building retail-and-upper-floors freehold bought as a hotel conversion at £2.4M on an 18-month bridge at 0.95% pm, refurbished to a 16-room boutique hotel with retained ground-floor retail, termed out at 60% LTV at around 7.5% pa.

Deal types where short-term commercial debt is the right tool

• Central Oxford listed-building hotel conversions (retail and upper-floor stock converting to C1 hotel, often with retained ground-floor commercial)
• Cowley industrial unit refurbishment bridges in the BMW Plant adjacency, light-industrial estates being reconfigured for trade-counter and Class E mixed use
• Investors buying vacant central Oxford office floorplates for refurbishment and re-letting around George Street, New Road and Park End Street
• Cowley Road and Walton Street semi-commercial conversion deals (Class E to retail-plus-residential)
• Oxford Science Park-fringe converted offices being re-let to life sciences and professional services tenants as development exits
• Trading-business operator buyouts where the new operator needs 12 months of accounts before high-street refinancing
• Auction-bought commercial assets (typical 28-day completion timeframe rules out term mortgage processing)
• Change-of-use conversion deals through Oxford City Council planning (B8 to Class E, B-class to mixed commercial)

Commercial Bridge-to-Let FAQs