Can I Buy a Commercial or Investment Property Before Selling Another? Bridging Finance Explained
Yes, potentially. Bridging finance can help eligible Australian business owners, property investors and developers buy a commercial or investment property before they have sold another property or completed a longer-term refinance.
A bridging loan is short-term, property-backed finance designed to cover a timing gap. It may allow a borrower to secure a time-sensitive acquisition, settle an investment purchase, complete a development transaction or access business capital while waiting for a defined exit event.
For Assurity Capital, bridging finance is available for genuine business and investment purposes only. It is not consumer or owner-occupied home lending. Finance is subject to assessment, suitable security, eligibility, lender criteria, fees, approval and a realistic exit strategy.
What is commercial bridging finance?
Commercial bridging finance is a short-term loan that bridges the gap between an immediate funding need and an expected future event.
The expected event is commonly:
Sale of an existing commercial or investment property.
Refinance into a longer-term bank or non-bank facility.
Settlement of another property sale.
Completion and sale of a development.
A documented business sale or capital event.
Release of funds from a confirmed transaction.
The immediate need may be:
Buying a commercial property before selling another asset.
Securing an investment property at auction or under a short settlement.
Acquiring a development site.
Paying an urgent settlement shortfall.
Refinancing an expiring private loan while permanent finance is arranged.
Funding business operations or a project while a property sale is pending.
Can I buy before I sell with a private bridging loan?
Potentially, yes.
A private bridging loan may be considered where a borrower has suitable real estate security, a clear business or investment purpose and a realistic plan to repay the facility.
For example, a commercial property owner may identify a strategic warehouse or retail asset to purchase before their current investment property has sold. A private bridging facility may help complete the acquisition, with the sale of the existing property forming part of the exit strategy.
A property developer may also use short-term bridging finance to secure a site before development finance is finalised.
The key issue is whether the combined debt remains appropriate for the property security and whether the proposed sale or refinance is credible.
How does bridging finance work?
A bridging lender assesses the full transaction, including the property being purchased, the property being sold or refinanced, existing debt and the proposed exit.
The lender may take a first mortgage, second mortgage or other acceptable property security position depending on the structure.
A typical bridging-finance process includes:
Identifying the immediate funding need and required settlement date.
Confirming the security property or properties.
Reviewing the existing mortgage balances and payout figures.
Assessing the property value and total loan-to-value ratio, or LVR.
Reviewing the proposed exit strategy.
Preparing loan and legal documents.
Settling the bridging facility, subject to lender conditions.
The facility is then repaid when the exit occurs, such as through a property sale, bank refinance or other documented event.
What is peak debt in bridging finance?
Peak debt is the highest level of total debt that exists while the bridging loan is in place.
For example:
Existing commercial property debt: $800,000
New investment property purchase: $1,200,000
Bridging loan required to complete purchase: $900,000
During the bridging period, the borrower may have debt connected to both properties. The lender assesses whether the total amount, including the new facility and existing liabilities, is appropriate for the security and exit strategy.
A borrower should understand the peak debt position, interest costs and how the total debt will reduce once the existing property is sold or the long-term refinance settles.
What can bridging finance be used for?
For eligible business and investment purposes, bridging finance may be used for:
Commercial property acquisition.
Investment-property purchases.
Development-site acquisition.
Auction or short-settlement purchases.
Settlement funding.
Business-property purchases.
Refinancing an expiring private loan.
Development completion costs.
Working capital while awaiting a property sale.
Debt restructuring while long-term finance is arranged.
Accessing equity while an existing property is being sold.
The loan purpose must be specific and eligible. A bridging loan should address a genuine timing gap, rather than create an open-ended debt obligation.
How long does a private bridging loan last?
The term depends on the transaction, property security and exit strategy.
Private bridging finance is generally short-term. The right term should allow enough time for the intended sale, refinance, development completion or capital event to occur while keeping the loan structure focused and responsible.
A borrower relying on a property sale should allow for realistic market conditions, the property’s marketability, sale costs and a contingency if the transaction takes longer than expected.
A borrower relying on a bank refinance should allow sufficient time for valuation, financial assessment, credit approval and settlement.
How much can I borrow with bridging finance?
The amount available depends on the property security, existing debt, lender’s accepted value, loan purpose and exit strategy.
A lender will assess the loan-to-value ratio, or LVR. For a bridging loan involving multiple properties, the lender may consider the total debt against the value of all accepted security properties.
For example:
Existing investment property value: $2,000,000
Existing mortgage balance: $700,000
New commercial property value: $1,500,000
Total debt after bridging facility: $1,800,000
Total security value: $3,500,000
Total LVR: 51.4%
This example is for illustration only. The available amount depends on the full transaction, including property types, locations, existing security positions, costs, term and exit strategy.
What does a private bridging lender assess?
A private lender will look at more than just the property value.
Key assessment factors can include:
Security-property type, location and marketability.
Existing mortgages, caveats or other registered interests.
Current property value and supporting valuation evidence.
Proposed loan amount and LVR.
Purpose of the bridging facility.
Required settlement date.
The borrower’s business or investment background.
The expected sale price and sale timeframe.
The strength of a planned bank or non-bank refinance.
Whether the exit has a realistic contingency.
The exit strategy is central. A lender needs to understand precisely how and when the bridging loan will be repaid.
Can I use a second mortgage for bridging finance?
Potentially, yes.
A second mortgage may be considered where a borrower already has a first mortgage over a property but has sufficient equity remaining.
This can be useful when the borrower wants to preserve the existing first mortgage rather than refinance it. The second mortgage can provide short-term funding behind the first lender for an eligible business or investment purpose.
The lender will assess the combined LVR, which includes both the existing first mortgage and the proposed second mortgage.
Because a second mortgage ranks behind the first mortgage, the lender will usually assess the property, available equity and exit strategy conservatively.
How quickly can a private bridging loan settle?
In a straightforward scenario, indicative terms may be available within 24 to 48 hours. Settlement may be possible within days where the security, valuation, legal documentation, existing debt and lender conditions can be completed promptly.
A bridging loan can take longer where:
A formal valuation is required.
The property is specialised, regional or complex.
An existing lender needs to provide a payout figure or consent.
There are title issues, caveats or legal complications.
The borrower is using a complex company, trust or SMSF structure.
The proposed exit needs more evidence.
A short settlement date should be disclosed at the start. No finance or settlement date is guaranteed until the complete scenario has been assessed.
What are the risks of bridging finance?
Bridging finance can help a borrower act on a time-sensitive opportunity, but it is a serious property-backed commitment.
The key risks include:
The property sale taking longer than expected.
A sale achieving less than the expected price.
A bank refinance being delayed or declined.
Interest, fees and costs increasing the total debt.
Higher peak debt during the bridging period.
Capitalised interest increasing the payout figure.
Property values changing before the exit occurs.
Default consequences if the facility cannot be repaid as agreed.
Before proceeding, borrowers should understand the total cost of the loan, the peak debt, the repayment date and the consequences if the exit is delayed. Independent legal, financial and tax advice should be obtained where appropriate.
Commercial and investment bridging finance with Assurity Capital
Assurity Capital assists business owners, property investors and developers across Sydney, NSW and Australia with short-term property-backed bridging finance.
We consider private first mortgages, second mortgages and bridging facilities for eligible commercial, business and investment scenarios—such as property acquisitions, short settlements, development opportunities, expiring-loan refinances and equity release pending sale.
Every transaction is assessed individually, with a focus on suitable real estate security, a clear funding purpose and a realistic exit strategy.
Finance is subject to assessment, security, eligibility, lender criteria, fees and approval.
Frequently Asked Questions
Can I buy a commercial property before selling my current property?
Potentially. Bridging finance may allow an eligible business owner or investor to purchase a commercial or investment property before selling another asset, subject to suitable security, lender criteria and a realistic exit strategy.
Is bridging finance available for investment properties?
Potentially. Private bridging finance may be used for eligible investment-property purchases, refinancing, development or short-term funding requirements.
What is peak debt in a bridging loan?
Peak debt is the highest level of total debt while the bridging facility is in place. It may include existing mortgages and the new bridging loan.
Can I get bridging finance with an existing mortgage?
Potentially. A private lender may consider a first-mortgage refinance or a second mortgage structure where there is sufficient equity and the transaction meets lender criteria.
How is a bridging loan repaid?
A bridging loan is usually repaid through a defined exit strategy, such as sale of a property, refinance into a longer-term facility, development completion and sale, or another documented capital event.
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