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What Is a Commercial Bridge Loan? A Guide for Business Owners

commercial bridge loan
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At some point, most small and medium enterprises or SMEs will need financing. Pursuing business growth, financing working capital gaps, commercial property renovations and upgrades, or digital transformation – all call for additional funds. Thankfully, SMEs in Singapore can turn to commercial bridge loans to access funds.

Entrepreneurs in Singapore can tap government-assisted schemes, such as the Temporary Bridging Loan and SME Working Capital Loan. These government-assisted commercial bridge loans were introduced in 2020 during the height of the COVID-19 pandemic as a way for the government to support SMEs.

These bridge loans can be accessed through banks and participating financial institutions. On top of that, entrepreneurs can also take out business loans or personal loans with licensed money lenders in Singapore.

What Is a Commercial Bridge Loan?

Bridge loans – also called bridge financing, interim financing, or gap financing, are used to finance immediate opportunities. Commercial bridge loans are used to “bridge the gap” between the enterprise’s current needs as they wait for long-term financing solutions. Any loan for the business can be called a commercial bridge loan.

In Singapore, the government offers business loan schemes to support SMEs. Entrepreneurs can leverage these government-assisted loans to manage rising costs as well as accelerate business growth.

Here are two of the most common commercial bridge loans

  1. Temporary Bridging Loan Programme (TBLP): This commercial bridge loan was introduced in March 2020 and was extended to 30 September 2022. With this bridge loan, eligible companies can borrow up to S$1 million with a maximum repayment period of 5 years. What makes TBLP attractive to SMEs is the interest rate that is capped at 5.5%. With this type of bridge loan, the government has a risk share of 70%. This encourages banks and financial institutions to offer TBLP to entrepreneurs.
  2. SME Working Capital Loan: The SME Working Capital Loan in Singapore will be enhanced from 1 October 2022 to 31 March 2023. With this bridge loan, business owners can borrow up to S$300,000 with a maximum repayment period of 5 years. However, this bridge loan is only available for Small and Medium Enterprises (SMEs).

Note: Do not confuse commercial bridge loans with home bridging loans. The latter is used by homeowners to get access to funds to pay for the down-payment of their new home while they wait for the sales proceeds of their old property.

See Also: SME micro loan is an unsecured working capital loan program that can help with your business’ cash flow and other expenses by providing a line of credit

Common Uses of Commercial Bridge Loans

Commercial bridge loans have a wide variety of uses. For one, the funds can be used to purchase and improve a commercial property. Other common reasons include:

  • Renovating commercial real estate for improvements
  • Buying commercial property for business expansion
  • Paying for rent of a commercial property
  • Buying new equipment or machinery
  • Boost cash flow for payroll

How Do Commercial Bridge Loans Work?

Bridge loans provide you with the funding you need to grab business opportunities immediately. For example, you want to purchase a commercial property but don’t have a long-term form of financing yet or maybe you’re waiting to refinance your existing business loan. You can take up a temporary bridge loan to pay for the down payment.

Take a look at the common use-cases for commercial bridge loans to understand how they can be useful for SMEs:

  • Investing in Commercial Real Estate: In some countries, bridge loans are also called commercial real estate bridge loans. For example, a storehouse in your area is on the market. With a bridge loan, you can secure the funds necessary to purchase the storehouse immediately.
  • Tiding Your Business Over As You Wait For Long-Term Financing: You can also use a bridging loan to pay for immediate cash flow needs while you wait for long-term financing.
  • Purchasing Inventory: When you need to boost cash flow to stock up on inventory, you can take a bridge loan to get access to a significant amount of capital.

Commercial bridge loan lenders, such as banks, will evaluate your company holistically. They will take a look at the enterprise’s past financial performance, current bank statement records, credit score, and more. Additionally, these bridge loan lenders may also take a look into the guarantor’s personal credit records.

Note that in Singapore, the Temporary Bridging Loan and SME Working Capital Loan are unsecured business loans. That said, their structure will be similar to unsecured business term loans.

Pros and Cons

Just like any type of loan, bridge loans have advantages as well as potential drawbacks:


  • Offer immediate funding. This allows you to grab business opportunities, pay commercial rent, or acquire a commercial property.
  • Get access to significant capital quickly
  • Capped interest rate. Temporary Bridge Loans have an interest rate that is capped at 5.5% which is significantly lower than traditional bank business loans.
  • New start-ups may apply. The business entity must be registered and physically present in Singapore. Additionally, it must have at least 30% local equity held directly or indirectly by Singaporean(s) and/or Singapore Permanent Resident.


  • Shorter terms. Both Temporary Bridging Loans and SME Working Capital Loan have a maximum loan repayment period of 5 years.
  • Risky like any type of loan. With a shorter loan repayment, you’ll be paying a significant amount every month. If your business can’t generate enough income, it can create cash crunches for your business.

Commercial Bridge Loans vs Traditional Loans

  Temporary Bridge Loan Programme SME Working Capital Loan Business Term Loan Personal Loan
Purpose of the loan Provides access to working capital for business needs Provides access to working capital for business needs Used for equipment, real estate, or working capital Depends on the borrower’s needs
Maximum Loan Amount Up to S$1 million (from 1 April – 30 September 2022) Up to S$300,000 Up to S$500,000 Up to 10x your monthly income
Loan Tenure Up to 5 years Up to 5 years 1-5 years 1-7 years
Interest Rate Fixed interest rate capped at 5.5% Subject to Participating Financial Institution’s assessment 7-12% p.a. Approximately 5.6% p.a.

Things To Consider When Taking a Bridge Loan

  • Funding Urgency: If you’re taking out a bridge loan for an urgent business opportunity, make sure that the funds will be disbursed on time. With banks or other financial institutions, your commercial bridge loan application may take between 1 to 2 weeks. That said, depending on your urgent needs, you may need to look outside a traditional bridge loan lender, such as licensed money lenders. With legal lenders, you can get financing within 24 hours.
  • Early Repayment Discount: Some lenders may offer early repayment incentives, such as discounts. Note that banks may charge fees if you pay in advance. For this reason, it’s best to ask about the fees and charges involved in taking a bridge loan.
  • How Much You Can Afford: Before taking a commercial bridge loan, make sure that you can afford the monthly loan repayments. Borrow only what you need and compare interest rates between institutions.

Best Commercial Bridge Loan Providers in Singapore

Banks and Participating Financial Institutions

You may approach the following Participating Financial Institutions to apply for a Temporary Bridging Loan. Note that your bridge loan application will be subject to the banks’ credit approval.

bridge loan institutions

(Source: Enterprise Singapore)

Here are some of the banking giants that offer Temporary Bridging Loans and SME Working Capital Loans:

  • DBS Bank
  • Maybank Singapore
  • UOB

Licensed Money Lenders in Singapore

Not qualified for the Temporary Bridging Loan Programme (TLBP) or SME Working Loan? Or maybe you need faster funding? You may benefit more from a licensed money lender in Singapore.

You can take out a business loan with a licensed money lender. With this loan, you can borrow up to S$200,000 at an interest rate of 5% to 15%. However, a business loan with a licensed lender is considered short-term financing since it has a repayment period of up to 24 months only.

Is it Safe to Borrow from Licensed Moneylenders?

Yes. Licensed lenders are regulated by the Ministry of Law in Singapore. Make sure to check the lender’s credibility and license by visiting MinLaw’s website. There you will find the complete list of licensed moneylenders in Singapore.



1. What is an SME Bridging Loan?

In Singapore, entrepreneurs can tap government-assisted loan schemes to access business funds. Among the SME bridging loans available is the Temporary Bridging Loan wherein eligible companies can borrow up to S$1 million at an interest rate of up to 5.5%.

Another SME bridging loan available is the SME Working Capital which offers up to S$300,000. Starting from 1 October 2022 to 31 March 2023, eligible entrepreneurs can borrow up to S$500,000.

2. Can You Get a Bridging Loan on a Commercial Property?

The short answer is: yes. Commercial bridging loans are used to fill financial gaps immediately. You can use a bridging loan to acquire commercial property quickly while you wait for more long-term financing.


Tapping government-assisted schemes, such as Temporary Bridging Loan and SME Working Capital Loan, is a smart solution for common business financial problems. But it’s important to recognize the risks that come with these loans. That said, make sure that your business investment will pay off so you can make timely loan repayments.

Key Takeaway

  • These bridge loans can be accessed through banks and participating financial institutions.
  • Commercial bridge loans are used to “bridge the gap” between the enterprise’s current needs as they wait for more long-term financing options.
  • In Singapore, the government offers business loan schemes to support SMEs to manage rising costs and accelerate business growth.
  • If you don’t qualify for TBLP or SME Working Capital Loans, you can also look into non-traditional loan lenders, such as licensed money lenders.

Take the first step towards your goals with Loan Advisor! Easily compare and find the top loan packages with the lowest interest rates from the best licensed moneylenders in Singapore. Request up to three loan quotes today!

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