Bridging finance for warehouse and industrial property

How much can you borrow on a bridging loan?

Bridging on a warehouse or industrial unit is usually sized up to around 65 to 75 percent loan to value (LTV) against the open market value of the building. Where the deal is a purchase, the lender takes the lower of the price and the valuation, so buying below value can mean a larger advance relative to what you pay.

If you are also funding works, some lenders will lend against the projected value once the refurbishment is complete, releasing the cost of the works in stages. That can lift the effective loan but tightens the lender's focus on your costings and the exit. We size the bridge so the warehouse carries the debt and the refinance or sale clears it cleanly.

What rates and terms apply?

Bridging is priced per month rather than per year, reflecting that it is short-term money. Rates commonly start from around 0.75 percent a month and move with the asset, the loan to value (LTV) and the strength of the exit. A clean, low-leverage bridge on a sound industrial unit prices keenest; a vacant building at higher LTV costs more.

Terms typically run from 3 to 24 months. Interest is usually rolled up and settled at the end, or retained from the advance at the outset, so there are no monthly payments to find while the warehouse is being worked on or let up. We confirm the exact structure with each lender and set the term long enough to deliver the exit without pressure.

How quickly can it complete?

Speed is the point of bridging. Where the valuation and the legal work run smoothly, a bridge on a warehouse can often complete within a few weeks, and experienced lenders will work to a fixed deadline such as a 28 day auction completion. We prioritise funders who can genuinely move at that pace rather than those who quote fast and drift.

What keeps a case on track is preparation. Having the asset details, your identity and structure, the valuation booked and a credible exit ready from day one removes the usual hold-ups. We line these up at the outset so the lender, the valuer and the solicitors can run in parallel rather than in sequence.

What is the exit?

Every bridge is arranged around its exit, and the lender underwrites that exit as closely as the asset. The two routes are a refinance onto a long-term commercial mortgage once the warehouse is let and the income settled, or a sale of the industrial unit. A weak or vague exit is the most common reason a bridge is declined.

Where the exit is a refinance, we line up the eventual commercial mortgage in parallel so the move off the bridge is smooth and the term lender's appetite is known before you start. Where the exit is a sale, we sanity-check the timeline and pricing against the market so the term gives you room to transact.

Can you refinance or remortgage afterwards?

Yes, and for most borrowers that is the whole plan. Once a part-let or vacant warehouse has been bought, refurbished or let up on the bridge, you remortgage onto a long-term commercial mortgage at a far lower rate. The bridge does the heavy lifting at speed; the term loan holds the asset cheaply for the long run.

The keener the income looks at refinance, the better the remortgage terms. A fully let industrial unit on a strong tenant covenant and a sensible lease supports a higher loan to value (LTV) and a lower rate than the same building stood empty. We arrange that refinance and place it with the lender offering the best long-term fit.