Guide
Bridging Loans for
Limited Companies & SPVs
Most bridging finance is arranged through a company structure. Here’s why, and how it affects your deal.
Why Use a Limited Company?
The majority of bridging loans we arrange are through limited company structures rather than in personal names. This isn’t by accident. There are compelling reasons why experienced property investors and developers operate through companies.
Tax Efficiency
Profits within a limited company are subject to corporation tax (currently 25%) rather than income tax (up to 45%). For higher-rate taxpayers, the savings are substantial. Mortgage interest relief (Section 24) no longer applies to individual landlords, but companies can still deduct finance costs as a business expense.
Liability Protection
A limited company is a separate legal entity. If a project goes wrong, your personal assets have a layer of protection (though personal guarantees on bridging loans do create personal exposure — more on this below).
Portfolio Management
Holding properties in company structures makes portfolio management cleaner. Each property or project can sit in its own SPV, making accounting, disposal, and financing simpler. Selling an SPV that holds a property can be more tax-efficient than selling the property itself.
Lender Preference
Many bridging lenders actually prefer lending to companies. It simplifies their security position, particularly on unregulated commercial deals. Some lenders offer marginally better terms for company borrowers.
SPV vs Trading Company
Most bridging lenders prefer the borrowing entity to be an SPV (Special Purpose Vehicle) — a company set up purely to hold a specific property or execute a specific deal. It has no other trading activity, no other creditors, and no other liabilities. This gives the lender a clean security position.
A trading company — one with employees, contracts, revenue, and other business activities — is more complex for a lender to secure against. There are other creditors, potential claims, and a trading history to consider. It’s not a dealbreaker, but it does introduce additional due diligence.
| Factor | SPV | Trading Company |
|---|---|---|
| Lender preference | Strongly preferred | Accepted with additional checks |
| Due diligence | Minimal — clean entity | Management accounts, creditor checks |
| Speed | Faster — less to review | Adds 1–2 weeks typically |
| Rate impact | No impact | Possible slight premium |
| Setup cost | £12 at Companies House | Already exists |
Personal Guarantees
Here’s the part that tempers the liability protection argument. Most bridging lenders require a personal guarantee (PG) from the company’s directors. This means that while the company is the borrower, you personally guarantee the debt. If the company defaults and the property sale doesn’t cover the outstanding balance, the lender can pursue you personally for the shortfall.
A personal guarantee typically covers the full loan amount plus interest and costs. Some lenders require it from all directors; others only from the main guarantor. The extent of the PG is always disclosed upfront and forms part of the loan offer.
If you want to avoid personal guarantees entirely, it is possible on certain deals — usually larger loans with strong LTV positions. See our no personal guarantee options. Expect lower LTV caps (typically 60–65%) and a rate premium.
What Lenders Need From the Company
The documentation requirements for company borrowers are straightforward. For an SPV, lenders typically need:
SPV Requirements
- Certificate of incorporation
- Memorandum and articles of association
- Proof of directorship (Companies House confirmation)
- Confirmation of shareholders
- Company bank account details
- Director ID verification (passport, proof of address)
Additional for Trading Companies
- Last 2 years’ filed accounts
- Management accounts (if year-end is more than 6 months ago)
- Business bank statements (3–6 months)
- Details of existing creditors / charges
- Business plan or trading summary
- Confirmation of no outstanding HMRC liabilities
Setting Up an SPV
If you don’t already have a company, setting up an SPV is quick and cheap. The process:
Incorporate at Companies House
Online registration costs £12 and can be completed in hours. Your solicitor can handle this, or you can do it yourself. Choose a name, register the directors and shareholders, and submit standard articles of association. SIC code 68100 (buying and selling of own real estate) is typical for property SPVs.
Open a Business Bank Account
The company needs a bank account for the loan funds. Digital banks (Tide, Starling Business) can open accounts within 24–48 hours for new SPVs. Traditional banks take longer but may be required by some lenders.
Proceed With the Loan Application
That’s it. An SPV can be ready to borrow within days. The lender’s solicitor will run company searches and confirm the entity is clean. This adds perhaps 1–2 days to the legal process compared to a personal name application.
How It Affects the Loan Process
Borrowing through a company adds minimal complexity to the process. For an SPV, the impact is negligible — perhaps an extra 1–2 days for company searches by the lender’s solicitor. For a trading company, allow an extra week for the additional due diligence on accounts and creditors.
The loan offer will be addressed to the company, with personal guarantees from the directors named separately. Completion mechanics are the same — funds go to the company’s solicitor, who completes the purchase or refinance on the company’s behalf.
One practical point: ensure the company has the appropriate objects clause in its articles to acquire and hold property. Standard articles usually cover this, but it’s worth confirming with your solicitor. Lenders will check.
Tax Considerations
We are not tax advisers, and you should always take professional tax advice for your specific circumstances. However, these are the broad reasons property investors use company structures:
Corporation Tax vs Income Tax
Company profits are taxed at the corporation tax rate (25%) rather than personal income tax rates (up to 45%). For higher-rate taxpayers building a portfolio, this difference is significant. Profits can be reinvested within the company without triggering additional personal tax until dividends are drawn.
Section 24 Relief
Since the Section 24 changes, individual landlords can no longer deduct mortgage interest as an expense — they receive a basic-rate tax credit instead. Companies are unaffected: finance costs remain a fully deductible business expense. For leveraged portfolios, this alone can justify a company structure.
Stamp Duty Considerations
Companies pay the 3% stamp duty surcharge on residential purchases. However, for investors who would already pay the surcharge (because they own other properties), there’s no additional cost. On commercial property, there’s no surcharge regardless. Transferring existing properties into a company structure can trigger stamp duty, so take advice before restructuring.
Capital Gains and Disposal
Selling an SPV (the company shares) rather than the property itself can be more tax-efficient for the buyer and potentially for you. This is common on larger deals and portfolio disposals. The mechanics are complex — always take specialist advice.
We work with borrowers using company structures every day. If you’re unsure whether a company is right for your deal, talk to us. We can’t give tax advice, but we can tell you how the lending landscape works for company vs personal name borrowers and connect you with accountants who specialise in property tax.
Frequently Asked Questions
Can you get a bridging loan with a limited company?
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