New seven-year facility combines bridging and term finance
Businesses undertaking property refurbishments or struggling to meet traditional mortgage requirements now have a new option for financing, as Allica Bank launches a loan that blends bridging finance with long-term lending.
The new product offers borrowers a single seven-year facility that begins with short-term bridging rates and converts into a term loan once certain project milestones are met.
By combining both phases into one loan, the offering aims to streamline the borrowing process for established small and medium-sized enterprises (SMEs) looking to secure commercial property finance. The facility automatically transitions to a lower-cost term loan once agreed conditions—such as tenant occupancy or completion of refurbishments—are fulfilled.
Allica said the loan is particularly useful for SMEs whose projects do not initially qualify for standard commercial mortgage terms. Borrowers will also have the option to release equity at the transition point, providing access to further capital without reapplying for a new loan. Brokers involved in these transactions will receive commission at both the start of the loan and at the point of transition.
Two versions of the product are available. The Stabiliser is aimed at owner-occupiers and businesses working toward commercial mortgage eligibility, with loan amounts ranging from £250,000 to £5 million. During the bridging period, rates start at Bank Base Rate (BBR) + 6.45%.
On the other hand, the Improver is geared toward refurbishment projects, particularly those focused on boosting a property’s environmental performance. It offers loans from £500,000 to £5 million, with bridging rates beginning at BBR + 7.05%.
In both cases, the loan converts to a term facility with rates starting at BBR + 2.90% for owner-occupiers and BBR + 4.45% for commercial property investors once trigger conditions are met.
The launch follows a record month in April for Allica’s bridging finance team, which saw the highest level of new lending and broker referrals since its acquisition of specialist lender Tuscan in August 2023. That deal marked the bank’s entry into the commercial bridging market.
“We’re proud to launch Allica’s new bridge-to-term proposition—a truly innovative way to give brokers and borrowers the certainty they need in a changing market. By combining bridging and term lending into a single, streamlined journey, we’re helping established businesses act quickly and confidently on their property plans—without the usual delays, fees, or duplicate underwriting,” said Nick Baker, chief commercial officer at Allica Bank.
“This launch is the result of significant work from our team, and close collaboration with our broker community. It’s a major step forward in our ambition for Allica to become a break-out bridging lender.”
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