A mixed-use property combines commercial and residential space in one building. Typical examples are a shop or café with flats above, a pub with living accommodation, or offices with apartments over them. High-street lenders often find these buildings awkward, especially if they need work or have to be bought quickly. A bridging loan covers that gap and is repaid when the building is refinanced or sold.
What the loan is used for
Borrowers use mixed-use bridging to buy the building before longer-term finance is ready, including at auction, to fund refurbishment or a conversion, to release equity from a building they already own, or to buy a new property before another one sells. Loans considered on this site range from £25,000 to £25 million. If the works are a full development, construction bridging may fit better than a straight purchase loan.
Interest is charged monthly, typically from 0.4% to 1.5% per month depending on the property, the term and the loan-to-value. It can often be rolled up so nothing is paid monthly, or serviced each month. Arrangement fees are often 1% to 2% of the loan, plus valuation and legal costs. Try the figures in the bridging loan calculator. There is no broker fee for the comparison.
What lenders look at
The property and the exit matter more than income alone. A lender will usually want the split between commercial and residential space, an independent valuation, details of any leases and tenants, a documented way to repay, and, where there are works, a schedule of costs and a realistic timetable. Individuals, companies and partnerships can enquire. Adverse credit does not automatically rule a case out, but it has to be explained.
A decision in principle can often be given within 24 hours. Straightforward cases can complete in as little as 7 days. Mixed-use valuations and lease reviews often take longer, so gather the papers before you apply. Auction completion is commonly required within 28 days, which is covered on our auction finance page.
Valuation and value you can add
Valuers usually look at the commercial and residential parts separately and together. Lease length, tenant quality, vacancy, condition and local sales all affect the figure, as does whether flats could later be sold on their own. Borrowers sometimes add value by improving the commercial unit, letting vacant space, or converting upper floors. Model the interest and fees for the whole term against that change in value, and keep a contingency if the works or the lettings slip.
How the loan is repaid
The main exits are refinancing onto longer-term mixed-use or commercial finance once the building is let and stable, selling the whole building, or selling individual units where they can be separately titled. Have a backup if the refinance depends on new leases. A lender will want an exit that still works if letting takes longer than you hope. General purchase funding is explained under property bridging loans.
Questions investors ask
Can I bridge a shop with a flat above?
Yes. That is a common mixed-use case. The lender looks at both parts, any leases and the exit.
Do I need planning permission first?
Not always. Some people buy with bridging and then apply for a change of use. Say clearly which consents are already in place, because that affects the valuation and the exit.
How do the costs affect the return?
Monthly interest plus fees run for the whole term, including any overrun. A cheaper headline rate is not cheaper overall if the term is longer or the fees are higher. The calculator is there so you can compare those totals before you bid or exchange.
Next step
Send Adam the address, the commercial and residential split, the price, the loan amount and the exit, on 07973 197535 or the contact form. We compare a wide panel of UK bridging lenders. There is no broker fee.