Finance question
Can I get bridging finance to buy new business premises before I sell the old ones?
Often yes, if the equity across both properties and a believable sale give the lender a clear exit. Lenders publish maximum peak debt of 65% to 80% of value, and the best terms go to a closed bridge with a signed sale contract. Subject to lender assessment.
Get your free rate quote
Tell us a few details and we will come back with your indicative rate. No obligation.
Thanks, we are on it
Your enquiry is in. Our team will be in touch shortly with your indicative rate and next steps.
The short answer
The lender is lending against two properties and your exit
Bridging for business premises works by securing the loan over both buildings. You exchange on the new premises while the old one is on the market, and the lender looks at peak debt, which is your existing loan plus the bridge, against the combined value of the two properties. Published maximum peak debt runs from 65% to 80% of value depending on lender and security. One broker page says lenders typically cap a first mortgage bridge at 65%, with 75% possible through a specialist (bridging finance guide).
The exit is what the lender tests hardest. The cheapest pricing needs a signed sale contract or a refinance already approved. Otherwise a local agent's conservative appraisal or a written refinance approval can do the job. Terms are short, usually 6 to 12 months, and up to 24 at some lenders. If the sale slips past the term you pay an extension or default rate, so lenders want a buffer under the LVR cap. A sale that runs late adds roughly $6,000 to $8,600 a month on an $800,000 bridge.
Costs are the part to plan for. Lenders publish establishment or risk fees of 0.75% to 2.5% of the facility. Valuations run $1,500 to $5,000 and legal $2,000 to $5,000 on one broker's figures, and two properties means two valuations and two sets of searches. This guide covers business and investment purpose lending only. Ventas is a broker across 40+ lenders, paid by the lender on settlement, with no upfront fee to you.
Do you qualify?
What a bridging lender looks at across two properties.
Equity across both
Peak debt held at 65% to 75% of the combined value.
A believable exit
A signed sale contract is best, or a written refinance approval.
Clean title
Both properties in clear hands with a straight discharge path.
A time buffer
Room under the cap for a sale that takes three months longer.
Why owners bridge rather than wait
You do not lose the building
Exchange on the new premises without a sale first.
No monthly repayments
Interest is usually capitalised, and the bridge is repaid from the sale.
Refinance after settlement
The leftover debt on the new premises is moved to a standard loan.
A worked example
A business buys new premises for $1.4m with a $1m bridge and $400,000 of its own cash, while selling the old building at $900,000 with $300,000 owing. Peak debt is $1.3m against combined value of $2.3m, about 57%. After $27,000 of assumed selling costs and the $300,000 loan, $573,000 of the sale repays the bridge, leaving about $427,000 on the new premises before interest and fees. Illustrative only.
Common questions
Frequently asked questions
How much can I borrow on a business bridge?
Published maximum peak debt runs from 65% to 80% of value by lender and security. Vacant or development security sits lower than a tenanted commercial building.
What if my old premises do not sell in time?
You pay an extension or default rate. Default rates can run 4% to 6% above the standard rate, so keep a buffer under the cap for a slower sale.
What fees come with bridging?
Establishment or risk fees of 0.75% to 2.5% are published, plus valuation, legal and sometimes an exit fee of 0% to 1%. Two properties means two valuations.
How long can the bridge run?
Most run 6 to 12 months, and some lenders go to 24 months. A shorter term costs less but leaves less room if the sale is delayed.