The Client
This client was already a property investor and knew exactly what they were looking for – a building with potential, not a “perfect” finished asset.
The Opportunity
They came across a commercial property priced at £150,000 that immediately caught their attention. The numbers made sense, the location worked, and the upper floors could be converted into residential accommodation under permitted development.
It was the kind of opportunity that does not hang around for long.
The Problem
On paper, the client was in a strong position. They owned another property outright and had no issues with credit or experience.
The problem was simple – there was no spare cash available. Everything they owned was tied up in property, and this deal required:
- A deposit
- Money for refurbishment works, estimated at around £25,000
- A lender willing to look beyond a standard commercial mortgage
High-street lenders were not interested. No deposit, a commercial building, and works required – it did not fit their criteria.
Without a different approach, the client was going to lose the deal, despite having plenty of equity behind them.
How We Looked at It Differently
Rather than focusing on what the client did not have, cash, we looked at what they did have. They owned another property outright, valued at £100,000, which was not being used at all. That equity was just sitting there.
Instead of forcing the new purchase to stand alone, we structured the deal so both properties worked together. This is where a cross-charge bridging loan made sense.
The Solution
By using both properties as security, we arranged funding at 75% loan-to-value across the two assets combined, through a specialist lender comfortable with this type of structure.
The final funding looked like this:
- £75,000 released against the existing unencumbered property
- £112,500 provided toward the purchase of the commercial building
That gave the client enough to cover the purchase deposit, £37,500 for conversion and refurbishment works once the deal was fully structured, and legal fees, lender costs and interest.
Crucially, this was all done under one loan, with one lender, and one set of legal work. No unnecessary complexity, no duplication of costs.
The Benefits
The client completed the purchase without putting any personal cash into the deal. They were able to start refurbishment work immediately, knowing the funding was already in place rather than being drip-fed or delayed.
Just as important, the lender agreed a clear exit plan from the outset. Once the works are finished, the client can refinance onto two separate long-term mortgages, one for each property, with lower valuation and arrangement fees than starting from scratch.
That clarity removed a lot of stress from the process.
Why This Worked
This deal was not about finding “more money” – it was about using what the client already had in the right way. By structuring the finance around the bigger picture, the client was able to:
- Secure a commercial property they would otherwise have missed
- Avoid injecting cash or draining reserves
- Use existing equity efficiently
- Keep a clean, realistic route onto long-term finance
The Bigger Takeaway
A lot of property investors think they are stuck because they do not have a deposit sitting in the bank. In reality, many are equity-rich without realising how powerful that can be.
With the right advice and the right structure, deals that look impossible on the surface can become achievable.
Frequently Asked Questions
Can I use equity in one property to fund the purchase of another?
Yes, this is known as a cross-charge bridging loan.
Both properties are used as security for a single loan, which can raise funds for a deposit, purchase costs and refurbishment works in one facility rather than several.
Can I get a bridging loan with no cash deposit?
Yes, if you have enough equity in an existing property to use as additional security.
Lenders assess the combined loan-to-value across all the security offered, not just the property being purchased.
What happens to a bridging loan once refurbishment work is finished?
The usual route is to refinance onto a standard long-term mortgage, known as the exit strategy.
Agreeing this exit at the outset, before the bridging loan even completes, gives a clear route off short-term finance rather than leaving it as an open question.
Can a commercial property with upper floors be converted to residential use?
In many cases, yes, often under permitted development rights rather than requiring full planning permission.
Lender appetite for this type of conversion varies, so it is worth confirming financing options before committing to a purchase that depends on it.
Commercial Finance Network is a whole-of-market FCA authorised commercial finance broker working with property investors, developers, and businesses across the UK and internationally. We work across the full specialist bridging panel and will tell you which lenders will engage with your deal, what LTV and rate to expect, and how to structure the application before anything is submitted.
Commercial Finance Network is directly authorised and regulated by the Financial Conduct Authority. Your property may be repossessed if you do not keep up repayments on a loan secured against it. Buy-to-let and business-purpose lending secured against investment property is not regulated by the Financial Conduct Authority.
Call us on +44 1494 622 111 or email info@cfnuk.com to speak to a specialist directly.
Related Pages
- Bridging Loans – fast, flexible funding secured against property, including cross-charge structures
- Commercial Mortgages – whole-of-market advice for commercial property purchases
- Semi-Commercial Mortgages – financing for mixed commercial and residential use properties
- Commercial Mortgage Rates – current rate ranges by LTV band and property type
- Commercial Mortgage Calculator – estimate affordability and stress-tested borrowing