Bridging finance for business owners

The quick route to capital when timing is everything

Bridging finance is short-term funding designed to keep your plans moving while longer-term finance catches up. For UK business owners, it can unlock time-sensitive property opportunities, from auction purchases to refurbishments and buy-before-sell chains. The market has grown significantly, with the total bridging loan book expected to reach roughly £12.2bn by the end of 2025. That growth has not arrived by accident. It is driven by speed, flexibility, and loan-to-value options that can stretch further than standard mortgages.

Processing times have tightened. Some quarters in 2025 saw average processing at roughly 32 days, and other datasets across the year point to completions in about 43 days. That means you can move decisively on acquisitions, refinance quickly when a sale completes, or inject working capital into a refurbishment without waiting months for a traditional lender. Rates have edged down too, with competitive monthly pricing around 0.64% to 0.81% depending on circumstances, reflecting strong lender competition and stable base rates.

What does that mean in practical terms? If you are eyeing an investment purchase or a conversion project, bridging can fund the acquisition, the works, and the period before the exit. Average loan-to-value ratios sit around 52% to 54%, but some lenders will consider up to 75% subject to the asset and your exit plan. Use cases are expanding as well, with more demand for refurbishments, HMO conversions, and selective commercial-to-residential schemes. Regulated bridging has grown, and investment purchases have taken a larger share of activity too, illustrating a market that serves both owner-occupiers and portfolio builders.

Understanding APR is not just about percentages - it is about what you will pay in real terms. With bridging, clarity on fees, timing, and exit strategy is essential. Get those right and the product can be a precise tool: fast, adaptable finance that turns a tight deadline into a completed deal.

Bridging exists to buy you time - and turn timing into an advantage.

Who benefits most right now

If you are a UK business owner or property investor who needs decisive funding, bridging offers a pragmatic route. It suits buyers who must complete quickly, such as at auction, or who are waiting on a sale or refinance. It is also practical for value-add strategies where light refurbishments, HMO conversions, or change-of-use projects can increase rental yield or resale value. With regulated options available, homeowners looking to buy before they sell can also use bridging, provided there is a credible exit strategy.

Those operating in competitive markets - London, regional cities, or growth corridors - can leverage speed to outmanoeuvre slower buyers. Equally, if you need to consolidate, refinance, or reposition assets while base rates stabilise, the short-term nature of bridging helps you act now and tidy up the capital stack later.

Your funding paths at a glance

1. Regulated bridging - residential uses, including buy-before-sell and chain repair.

2. Unregulated bridging - investment and business purposes, including purchases and capital release.

3. Auction finance - pre-approved facilities to complete within 28 days.

4. Light refurbishment loans - funding for kitchens, bathrooms, cosmetic upgrades.

5. HMO and conversion bridging - upgrades and reconfigurations to boost yield.

6. Development exit bridging - refinance completed or near-complete projects to release cash.

7. Bridge-to-let - short-term bridge with a clear path to a buy-to-let remortgage.

Cost, impact, returns, and risks

Can you qualify?

Eligibility is rooted in the security offered, the credibility of your exit, and your experience. Lenders assess property type, location, condition, and marketability, then map that against your plan, such as sale, buy-to-let remortgage, or development exit. Expect standard checks on credit profile and affordability, but bridging focuses more on asset quality and repayment route than on traditional income metrics. Average market LTVs sit around the low-50s, though strong cases can reach up to 75% for the right properties and borrowers. Regulated loans are available for residential scenarios, while unregulated facilities cover investment and business uses.

Kandoo is a UK-based retail finance broker. We work with a panel of trusted lenders who understand speed and execution. If your project involves refurbishments, HMO conversions, or time-critical purchases, we help structure the loan, coordinate valuations and legals, and align the exit to your timeline. Clear documentation, a realistic schedule, and evidence of works or planning consent will strengthen your case.

What to do from first call to completion

1. Define purpose, budget, and exit strategy clearly.

2. Share property details, photos, and planning status.

3. Request a decision in principle with target timelines.

4. Instruct valuation and appoint solicitors promptly.

5. Finalise loan structure, fees, and conditions.

6. Satisfy underwriting queries and provide proofs.

7. Sign documents and draw down funds.

Advantages and trade-offs

Key checks before you commit

Before you proceed, test your exit against slower sales, conservative valuations, and modest rent assumptions. Build a contingency for overruns in materials, labour, and legals. Review the fee stack carefully - arrangement, broker, valuation, legal, and potential exit fees - and decide what to service monthly versus roll up. If you are buying at auction, ensure searches and legals can complete inside the deadline. For refurbishments or HMO conversions, confirm scope, contractor availability, and compliance demands so you are not left with a half-finished asset and an expiring term. Finally, secure a backup remortgage path in case base rates or criteria shift.

Alternative routes if bridging is not right

1. Buy-to-let or commercial mortgage for longer-term holds.

2. Secured business loan or second charge against existing equity.

3. Development finance for heavier works and ground-up builds.

4. Mezzanine funding to reduce equity input on larger schemes.

5. Asset refinancing or sale-and-leaseback to release capital.

Frequently asked questions

Q: How fast can I complete? A: Many cases complete in about 32 to 43 days. Auction timelines can be met with early preparation and responsive legals.

Q: What loan-to-value can I get? A: Average LTVs are around 52% to 54%. Strong cases can reach up to 75% depending on property, experience, and the exit.

Q: What do bridging rates cost? A: Expect competitive monthly rates roughly between 0.64% and 0.81% or higher for complex cases. The total cost depends on fees, term, and whether interest is serviced or rolled up.

Q: What are common exit strategies? A: Property sale is the most common, followed by refinancing to a buy-to-let or commercial mortgage once the project is stabilised or works are finished.

Q: Can I use bridging for refurbishments or HMOs? A: Yes. Short-term finance is widely used for light refurbs, HMO conversions, and even selective commercial-to-residential projects where the end value supports the exit.

Q: Is regulated bridging available? A: Yes. Regulated loans are available for certain residential uses, while unregulated loans suit investment and business purposes. Your adviser will guide you to the correct category.

How Kandoo can help

Kandoo is a UK-based retail finance broker that connects you with lenders who move quickly and price competitively. We assess your project, build a credible exit plan, and manage the process from decision in principle through valuation, legals, and completion. The result is a tailored facility that matches your timeline and objectives.

Important information

This article is for information only and is not personal advice. Bridging finance is secured on property and your asset may be at risk if you do not keep up repayments. Terms and eligibility vary by lender; seek professional advice before committing.