All funding products

Bridging finance.

Bridging finance is a short-term loan secured against property. Terms typically run from 1 to 24 months, with most facilities settled within 6 to 12. The defining characteristic isn't the property — it's the existence of a clear, near-term repayment event. If there's no credible exit, it's not bridging. It's just expensive borrowing.

The basics

What is bridging finance?

Common exits include the sale of the secured property; refinance onto a longer-term commercial mortgage or development facility; or receipt of a separate inflow — an investment round, a litigation settlement, the sale of another asset.

Bridging is priced and structured around speed. Where a commercial mortgage might take 8–16 weeks to complete, a well-prepared bridging deal can fund in 7–14 days. That speed is the product. Nothing else explains why a borrower would pay 1% per month for capital they could otherwise get for half the price.

Fit

When it works well.

Bridging earns its place when timing is the binding constraint:

• Auction purchases — completion required within 28 days, no time for a traditional mortgage.
• Chain breaks — buying a new property before the existing one sells.
• Property refurbishment — funding a buy-to-refurbish-to-refinance cycle.
• Below-market-value purchases — a motivated seller, a quick deal, a property worth meaningfully more than the price.
• Rescuing a stalled completion — the existing lender has pulled out and contracts are exchanged.
• Releasing equity for time-sensitive opportunities — funding a business acquisition, tax bill, or working capital injection where the property is the only available collateral.
• Bridging the gap on commercial property purchases — acquiring premises before long-term financing is in place.

The right shape: a clearly defined property asset, a credible exit within 12 months, and a borrower whose case for the loan stands up under scrutiny.

The honest part

When it's a bad idea.

Bridging is misused at scale in the UK market. Avoid it when:

• The exit is vague. "I'll refinance" without a lender in mind, or "I'll sell" in a falling market with no buyers, is not an exit. It's a wish.
• The funding need is long-term. If you actually need three to five years of capital, a commercial mortgage is half the cost. Bridging is a tool for months, not years.
• The numbers only work at full term. Many bridging deals look fine at 6 months and ruinous at 18. Roll-on costs are punishing.
• You're using it to delay an inevitable sale. Bridging often masks a slow-moving problem rather than solving it. Two years later, the property still hasn't sold and the loan has consumed the equity.
• You can't afford to lose the asset. If repayment fails, the lender will move quickly. Bridging lenders are equipped to enforce, and most do.
• You're an owner-occupier looking at regulated bridging on your home. It's possible, but usually a sign you should be having a different conversation — with a broker, an IFA, or your solvency adviser.
• The property has issues. Short leases, structural problems, planning uncertainty, or environmental issues will either kill the deal or push pricing into territory where the maths breaks.

The single most common bridging mistake: underestimating how long the exit will take. Sales fall through, refinances get declined, builders run over. Always model the deal at maximum term, not your best-case timeline.

Cost

Real costs.

Bridging is expensive. The total cost of a 12-month deal typically runs to 12%–20% of the loan amount, all-in.

Component	Typical range
Monthly interest	0.55%–1.5% per month (most prime deals 0.7%–1%)
Arrangement fee	1.5%–2.5% of loan, paid on drawdown
Exit fee (sometimes)	0%–2% of loan on repayment
Valuation fee	£500–£3,500; more for unusual assets
Legal fees (yours and lender's)	£2,000–£6,000
Broker fee (if used)	1%–2% of loan

Most bridging interest is rolled or retained — meaning it's added to the loan or deducted upfront. You don't make monthly payments. Helpful for cash flow during the loan, but it inflates the headline number.

Operational reality

Speed, complexity, certainty, flexibility.

Speed

This is the product. A well-prepared deal funds in 5–14 days. Complex deals, unusual assets, or first-time borrowers may take 3–6 weeks. Anything quoted faster than 5 days from a standing start is usually optimistic.

Complexity

Medium. Less complex than a commercial mortgage in some ways (less focus on income), more complex in others (asset scrutiny, exit verification). Most of the work is legal and valuation. The lender will care more about the property and the exit than your trading numbers.

Certainty

Mixed. Headline rates from bridging lenders are advertised aggressively and not always honoured. Pricing can move on valuation results, planning checks, or legal findings. Down-valuations are common in soft markets and can kill deals at the last minute. Always work with a lender that has a real track record, not a price comparison.

Flexibility

Limited within the loan, but flexible at the structural level. Most bridging loans are single-drawdown, fixed-term, no-questions-asked early repayment after a minimum period (typically 1–3 months). They're not a facility you draw and repay — they're a one-shot tool.

In the market

Who actually uses it.

• Property investors — buying, refurbishing, refinancing, repeating.
• Property developers — using bridging for site acquisition before development finance is drawn.
• High-net-worth individuals — chain breaks, tax planning, opportunistic purchases.
• Businesses raising capital against owned premises — releasing equity for acquisitions, working capital, or tax bills.
• Insolvency practitioners — funding orderly disposals.
• Auction buyers — the 28-day completion rule effectively requires bridging or cash.

UK gross bridging lending sits in the region of £8bn–£10bn per year, with the market split between specialist non-bank lenders, family offices, and a handful of banks. It's a deeply commercial market — the difference between a competent lender and a poor one is enormous, and the price isn't always the signal.

Other options

Alternatives.

• Commercial mortgage — cheaper, slower, better for long-term holds.
• Development finance — purpose-built for ground-up or major refurbishment projects with drawdowns against build progress.
• Second-charge mortgage — cheaper than bridging, slower than bridging, useful when the first charge is at a low rate you don't want to disturb.
• Asset finance against plant or equipment — if releasing capital is the goal and property isn't the only asset.
• Specialist BTL refinance — for property investors with rental income, often more efficient than a bridge-to-refinance cycle.
• Not borrowing at all — sometimes the right answer is to extend the contract, miss the auction, or wait for the sale.

Summary

Summary.

Bridging finance solves a specific problem: short-term capital against property when speed matters. It does that job extremely well. It is also one of the most misused products in the UK funding market, regularly used as a substitute for term financing the borrower can't otherwise access.

A good bridging deal has a clear asset, a credible exit, and a borrower whose numbers work even if the exit takes longer than expected. A bad bridging deal has none of those things and is usually identifiable from the first conversation.

If you find yourself negotiating an extension, the original deal was probably wrong.