Bridging finance provides fast, flexible capital when timing or structure prevents the use of conventional term debt. It’s a short-term facility secured against property, typically lasting 6–18 months, designed to bridge a funding gap until sale, refinance or development completion.
How It Works
Bridging loans are structured as interest-only facilities, with the full balance repaid via an agreed exit, usually a sale or refinance. Interest may be retained, rolled-up or serviced monthly, depending on borrower preference and lender criteria. Facilities are assessed primarily on asset value and exit credibility rather than income coverage, making them ideal for short-term scenarios.
Typical parameters:
Loan size: from around £100,000 – £10 million+
Maximum LTV: 75% (higher with additional security)
Term: 6 – 18 months
Speed: commonly 2 – 4 weeks, faster in exceptional cases
Market Overview
The UK bridging sector has grown rapidly, now exceeding £8–9 billion of annual lending, driven by investor demand for agility amid a slow traditional mortgage market.
Typical pricing ranges from 0.6%–1.25% per month, varying with leverage, term and asset quality.
Lenders include specialist banks, private funds and family offices, each with distinct risk appetites and criteria.
What Lenders Consider
While bridging is designed for speed, lenders still focus on fundamentals:
Property type and condition
Borrower experience and track record
Exit strategy feasibility
Valuation and legal readiness
A well-prepared proposal that clearly presents these factors significantly improves pricing and turnaround times.
Key Advantages
Rapid execution where speed is critical
Flexible underwriting on complex or transitional assets
No early repayment penalties with most lenders
Customisable term and interest structure
Suitable for corporate borrowers and SPVs