Quick answer
A commercial bridging loan is short-term, property-secured business finance that covers the gap between a cost that's due now and an event that will repay it, such as a property sale, refinance or expected payment. It's assessed mainly on the security and the exit rather than long-term serviceability. Amounts from $20,000 to $5,000,000 can be secured over commercial or residential property by first mortgage, second mortgage or caveat.
Key points
- Secured over property: first mortgage, second mortgage or caveat
- Assessed on security value, peak debt and the strength of the exit
- Terms are set around the exit date, with buffer for delay
- Used for purchases, delayed settlements, refinances, tax and working capital
- Amounts
- $20,000 to $5,000,000
- Security
- Commercial or residential property
- Repaid by
- An exit event, not years of instalments
- Purpose
- Business purposes only
Moneysmart defines bridging finance simply: short-term finance that covers the period between buying a new property and selling your existing one. In business, the idea stretches further. The “new property” might be a tax bill, a supplier, a production run or a set of premises. The “existing property” might be a refinance, a refund or a claim. But the shape is always the same: two events and a span between them.
A commercial bridging loan is that span, secured over property.
What is a commercial bridging loan used for?
The most common uses we see fall into a few families:
- Property moves: buying before you sell, paying a deposit before equity is free, or covering a delayed settlement.
- Finance timing: bridging to a slower refinance, or clearing something that’s blocking one.
- Money you’re owed: an R&D refund, an insurance payout, a grant payment or business sale proceeds.
- Unlocking a planned sale so the business can use the money now, while a listed property is still on the market.
What unites them is that the loan has a defined end. It isn’t meant to be repaid over years from profits; it’s meant to be repaid by one identifiable event.
How is a commercial bridge structured?
Think of it as four components, each of which has its own page:
| Component | The question it answers | Read more |
|---|---|---|
| Security | What property backs the loan, and in what position? | Second mortgage, caveat, residential security |
| Load | How high does the debt peak, and where does it land? | Peak debt and end debt |
| Span | Is the exit date fixed or open? | Open vs closed bridging |
| Cost | How are fees and interest paid during the term? | Bridging loan costs |
And one that sits outside the structure but determines everything: the exit. That’s why we have a whole section on exit plans.
How do lenders assess a commercial bridging loan?
Differently from a bank looking at a term loan. A term loan asks, “Can this business repay over years from its profits?” A bridge asks three narrower questions:
- Is there enough security? The property value, less existing loans, has to comfortably carry the peak debt.
- Is the exit real? A signed contract, an approval, a lodged claim or a registered R&D claim is evidence. A hope is not.
- Does the term fit? The loan needs to run long enough for the exit to happen even if it’s late.
Servicing still matters, in the sense that the loan’s costs need to be met while it runs. But because many bridges are structured with costs prepaid or added to the loan, the cash-flow test is often lighter than for a term loan. Past credit issues and ATO debt are considered case by case.
What does a strong application look like?
A strong commercial bridging application reads like a set of drawings with the measurements filled in:
- A clear one-paragraph summary: what you need, why, and what repays it.
- Property details: addresses, estimated values, existing loans and lenders.
- Exit evidence: contract, approval letter, claim number, R&D registration, grant agreement.
- Dates: when the money is needed and when the exit is expected, with a realistic buffer.
- Numbers: peak debt, net exit proceeds and end debt. The bridging calculator produces these.
If you’d like to test your plan against these points, you can have a bridging specialist look at it with a quick enquiry.
An illustrative example
A printing company owns its factory, worth about $2.4m with a $700k bank loan. It needs $600k to pay for a new press that will be partly funded by an equipment finance approval that won’t settle for ten weeks, plus a quarter’s tax that’s due now. A second mortgage bridge of $600k sits behind the bank. Peak debt is $1.3m, about 54% of the factory’s value. When the equipment finance settles, it repays most of the bridge; the rest is cleared from trading over the following months, with the term set to cover both. (Illustrative scenario.)
When is a commercial bridge the wrong tool?
- When there’s no identifiable exit and the need is really long-term debt. A term facility may suit better.
- When the peak debt leaves no margin for a lower value or a slower exit.
- When the purpose isn’t a business one. We arrange business-purpose finance only.
Being honest about these early saves everyone time. Our exit strength check is a good first filter.
Commercial bridging loan or bank term loan?
They solve different problems, and many businesses end up using both: the bridge first, the term loan after.
| Commercial bridging loan | Bank term loan | |
|---|---|---|
| Purpose | Span a gap to a specific event | Fund a long-term need |
| Assessed mainly on | Security and exit | Serviceability and history |
| Term | Set around the exit | Years |
| Repaid by | The exit event | Regular instalments |
| Speed | Usually quicker to arrange | Often slower |
If your need is genuinely long term, a term loan is usually the better home for it. If the need is temporary and something identifiable will repay it, a bridge is the right tool, and it can often lead into a term loan through a refinance exit.
Put your bridge on paper
If you can describe your two events, we can help you work out whether a commercial bridge fits and how it would be built. The enquiry takes about 60 seconds and there’s no credit check when you first enquire. We don’t broadcast your details to a crowd of lenders; one team handles it and a real person calls you back.
Please be accurate with property values, existing loans and dates. It means the structure we suggest on the first call is one that will actually work.
Frequently asked questions
What is a commercial bridging loan?
It's a short-term business loan secured over property that bridges the time between a need and the event that repays it. That event, called the exit, might be the sale of a property, a refinance, or an expected payment such as a refund or insurance claim.
How much can I borrow with a commercial bridging loan?
Property-secured bridging runs from $20,000 to $5,000,000. How much of that is available to you depends on the property's value, existing loans on it, the strength of your exit and the overall peak debt.
Do I need to show years of profits?
Not in the way a bank term loan does. Bridging lenders focus on the security and the exit, though they'll still want to understand the business and how the loan's costs are met while it runs.
Can residential property secure a commercial bridging loan?
Yes. A home or investment property can secure a loan for a business purpose. It's a significant decision, so it's worth understanding the risks and the exit clearly first.
How fast can a commercial bridging loan settle?
It depends on the valuation, the legal work, the security position and how quickly documents are provided. The biggest time savers are a clear exit and a complete document pack from the start.
Is bad credit a barrier?
Not automatically. Past credit issues and ATO debt are considered case by case. The security and the exit usually carry more weight.