Commercial Bridging Loans

The Challenge

Mark's bank was not the wrong lender — they were the wrong lender for this timeline. A standard commercial property loan through a major bank requires full assessment, valuation, credit committee sign-off, and legal preparation. In ideal conditions that takes four to six weeks. A 14-day unconditional settlement is simply outside what a retail bank's credit process can accommodate, not because the deal is difficult, but because the system is not built for that speed. The deal itself was straightforward: a well-established business owner, a trading history of nine years, a property already under contract providing the exit, and sufficient cash reserves to absorb any timing gap. The risk profile was not the problem. The timeline was.

What the bank had also not fully worked through was how the deal was structured. Mark did not need a $2,050,000 loan. He needed a bridge for the period between the new settlement and the old one — a window of 47 days. His $420,000 cash covered the deposit. The bridge was effectively securing his position until the sale proceeds cleared. The quantum of risk being underwritten by the lender was materially different from the headline purchase price, and specialist bridging lenders understand that distinction. Major banks typically do not assess it that way.

What We Did Differently

The first call I made Friday morning was to confirm that the auction purchase was still live and that Mark had the deposit funds ready to place that Saturday. He did. From there, I structured the presentation around what this deal actually was: a short-term bridging facility secured against the incoming property, with a clearly dated exit from the sale of the Arundel premises already under contract, supported by a business with nine years of trading history and no adverse credit events.

I contacted three lenders from our bridging finance specialist sub-panel — lenders who write bridging as a core product rather than an edge case. Two came back with indicative terms before close of business Friday. The stronger of the two offers came in at 9.45% interest only for a 90-day term, with a formal approval issued by midday Monday — 48 hours after the auction. The facility was structured to discharge automatically on receipt of the Arundel sale proceeds, with no early repayment penalties.

Mark won the auction Saturday at $2,060,000 — $10,000 above guide. Unconditional settlement was completed on day 14. The bridge ran for 42 days. When the Arundel settlement cleared, the bridging facility was discharged in full and Mark transitioned directly to a standard commercial term loan at significantly lower long-term rates.

The Outcome

Mark's business moved into the new premises in week seven. The additional 500 square metres resolved the operational constraints that had been limiting his growth for three years — additional racking, a second delivery bay, and enough floor space to take on a wholesale account he had been declining because the storage capacity wasn't there. Within six months of moving, his turnover had increased by 22 per cent.

The bridging cost — 42 days of interest at 9.45% on a $2,060,000 facility — came to approximately $22,400. Against a property he secured at or below comparable sales in the estate, and against the operational gains from doubling his floor area, Mark's view was that the bridging cost was the cheapest line item in the whole transaction. The alternative — losing the $206,000 auction deposit if settlement could not be achieved — was not a scenario either of us was prepared to consider.

His existing Arundel premises settled on time, 47 days after the auction. The bridging facility was closed. The long-term loan was structured through our panel at a rate that reflected the quality of the underlying asset and the strength of the business. Mark now owns both his trading history and the premises it operates from.