It’s a short-term loan secured by a retail property, such as a shop unit in a shopping mall, a row of retail shophouses, or any space zoned for retail use. The purpose is to “bridge” an immediate financial need – for example, to finance the purchase of a shop before long-term financing is in place, or to raise funds for a business expansion by leveraging a store property you own. Retail bridging loans work like other bridging loans: they are usually interest-only loans meant to be repaid within a short period (say 3 to 12 months). The collateral is the retail property itself (or properties), and once you secure permanent financing (like a mortgage or term loan) or obtain the needed funds through other means (such as selling an asset or increasing business revenue), you pay off the bridging loan.

Both individual investors and companies can apply, as long as they have an eligible retail property to pledge. If you are buying a retail unit (for instance, a strata-titled shop in a mall), you as an individual can be the borrower – the bridging loan would be extended to you and secured on that unit. If a company (say a retail business or an SPV) is purchasing or owns the property, the company can be the borrower, with directors typically providing personal guarantees. Like other bridging facilities, lenders often require the borrower to meet Accredited Investor criteria due to the nature of these loans. There are no nationality restrictions specific to commercial property, so foreigners investing in Singapore retail properties can also use bridging loans (keeping in mind they must pay relevant stamp duties but are not barred from ownership). The main qualification is having a solid collateral (the retail property with good value) and a credible plan to exit the loan. You won’t generally need to show extensive trading history or profits (unlike a normal bank loan that might look at the business performance) – the focus is on the property and exit route.

The retail property market can move quickly, especially for well-located units (like a popular mall shop or a prime street-front unit). If you need to act fast – for example, an opportunity arises to buy the unit where your business is a tenant, or an investor is selling a portfolio of shop units at a good price – a bridging loan gives you the buying power immediately. It allows you to complete the purchase in tight timeframes, beating out slower-financing competitors. Similarly, if you’re reconfiguring your business and need to relocate or open a new outlet, bridging finance can fund the acquisition or rental deposit of the new space before you free up capital from elsewhere. Another use: retail businesses with real estate might use bridging loans to manage cash flow; for instance, using a shop property they own as collateral to get a short-term loan to stock up inventory or renovate another outlet, then repaying when the season’s sales come in or once long-term financing is arranged. In essence, the bridging loan acts as a financial bridge that ensures you don’t lose strategic retail opportunities due to timing of cash, whether it’s buying a property at auction or bridging a gap in business funding.

Much like other property types, bridging lenders will typically lend up to around 70% of the retail property’s valuation (some may go slightly more or less depending on the property and risk). The loan amount starts at roughly S$1 million and can scale to tens of millions for larger retail portfolios or combined collateral. For example, if you’re buying a shop unit valued at S$2 million, you might get a bridging loan of about S$1.4 million (70%). If you needed to cover GST or renovation costs above that, you might have to inject some cash or provide additional collateral. If you own multiple retail units, some lenders can collateralize all of them to extend a bigger facility. The maximum loan also takes into account any existing loans – if the retail property already has a mortgage, the bridging lender either pays that off (becoming the first charge holder) or, less commonly, may lend on a second charge with a lower LTV. The exact amount you can borrow will be a function of the property’s marketability: a well-located freehold shop might fetch a high LTV, whereas a less central or short-lease tenure shop unit might be conservatively assessed.

Interest rates are generally similar to other bridging loans, often around 0.6-0.8% per month (roughly 7-10% per annum), though the range can vary. Retail properties as collateral are largely considered stable (especially if in good locations), but if a property is very niche (like a specialty use or in a mall with declining traffic), a lender could factor that into pricing or LTV. In contrast, bridging loans backed by something like a unit in a major shopping mall could be seen as relatively low risk due to strong resale value, thus getting a more favorable rate. Regardless, expect to pay monthly interest at a rate higher than standard bank loans – this is the premium for speed and flexibility. For instance, borrowing S$3 million might incur ~S$18,000 per month in interest at 0.6%/month. Many bridging loans for retail assets are interest-only, meaning you pay just the interest during the term and the principal at the end. Also budget for any setup fee (commonly 1-2%) and legal costs. Importantly, there is usually no penalty for early repayment beyond a minimum lock-in (if any), so if you can refinance or clear the loan sooner, you save on interest.

It can be arranged very quickly – often within a week or two from initial inquiry to disbursement, assuming you have your documents ready. In principle, approval can come in a day or two since the lender will quickly evaluate the property’s value and your exit plan. Retail properties might require a valuation or at least recent transaction comparisons, but lenders familiar with the area can expedite that. The legal process (title search, preparing the charge/mortgage, etc.) typically defines the timeline; still, bridging lenders work with law firms that know time is of the essence. If you’re, say, trying to complete a purchase of a shop in 14 days, let the lender know upfront – they will triage the deal to meet that deadline if possible. We’ve seen scenarios where funds were deployed in under 5 days for urgent deals. To help speed, ensure you have the Option to Purchase or Sale Agreement, proof of downpayment ability (if required to show you can put in some equity), and KYC documents all set. When timelines are extremely tight, some lenders might start the legal paperwork even before full approval, to save time. In short, bridging loans are built for speed, so they are the go-to solution when you can’t afford the delays of conventional financing in the retail property arena.

Yes, if there is enough equity in the property, the loan can be structured to include renovation or fit-out costs. For instance, if you buy a retail unit that needs refurbishment before your store opens, the bridging loan could potentially cover the purchase price plus an additional amount for renovations, up to the allowable LTV. Alternatively, if you already own the retail space and just need funds for renovations or a new shop fit-out, you can take a bridging loan against the property’s current value to fund those improvements. This is a common scenario: retailers might refurbish a shop to increase its value or to attract better rental income; a short-term loan finances the works, and once the upgrade is done and perhaps a new tenant (or improved business income) is secured, they refinance on better terms or pay off the loan. One thing to note is that bridging lenders will want to be confident that the renovations add value or at least that the property value covers the loan at all times – they might release the renovation funds in tranches (draw-downs) as works progress or ask for a budget. But by and large, they are quite willing to include renovation costs as part of the bridge loan since it often enhances the collateral value.

No, you don’t need an active tenant or business in the property to secure the loan, although having one can indirectly help. Bridging finance decisions are based on the property asset value and exit plan, not on current rental income. So even if the shop is vacant, you can get a bridging loan – the lender will look at what the property could be sold or valued at, not just whether it’s earning rent today. This is different from a bank loan, where vacant commercial property might be a problem due to no income. That said, if you do have a strong tenant with a lease, it can be a positive factor (it may increase the appraised value of the property or make it more liquid). But it’s not a requirement. Many retail bridging loans are done precisely in transitional periods – for example, between tenants or when an owner-occupier has moved out to renovate. Lenders understand this. They may ask about your plan for the property (e.g., “Will you be leasing it out? At roughly what rent?”) just to ensure your exit (like refinancing with a bank) is feasible, because eventually a bank will look at tenancy for the long-term loan. In summary, bridging lenders won’t demand that the property is tenanted right now; an empty shop can still serve as good security for a short-term loan as long as its value is there.

Retail real estate can be subject to market cycles and consumer trends. One consideration is valuation – retail properties in prime locations tend to hold value well, but those in less favorable locations or older malls can fluctuate. If the market changes (e.g., a big new mall draws traffic away, or economic downturn hits retail rents), refinancing might be harder or the property’s value could dip, which is a risk if you need to extend the bridge loan. It’s wise to have a buffer or alternate exit in case Plan A (like refinancing at a certain valuation) faces headwinds. Another consideration: stamp duties and taxes – while there’s no ABSD for pure commercial properties for any buyer, there is GST on commercial property purchases for GST-registered entities, which can affect cash flow (though you can claim it back if you’re registered). If GST is applicable on your purchase, ensure your bridging loan or your own funds cover that component until it’s reclaimed. Also, if you’re a business buying your own shop, consider the opportunity cost – tying up capital in real estate versus your business operations; bridging loans can mitigate some of that by providing financing, but you should still plan financially for running your business alongside servicing the loan interest. Lastly, always read the terms of the loan: some bridging loans for commercial properties might have slightly different clauses (like if the property sale or refinance doesn’t happen by a certain date, etc.). Work closely with the lender to manage timelines – if retail market conditions are soft, communicate early if you think you need an extension. With prudent planning, bridging loans are a powerful tool to leverage retail property opportunities, but like any leverage, they should be used with a clear endgame in sight.