Bridging finance for commercial refinancing

The fast lane to refinancing with confidence

Bridging finance gives UK businesses short-term funding to refinance quickly when time is tight. If a commercial mortgage is maturing, a sale is delayed, or a new opportunity demands speed, a bridge can keep momentum while you secure longer-term finance. The market has scaled rapidly, with completions hitting a record £7.34bn in 2024, up from £5.76bn in 2023, and a particularly strong Q4. Forecasts for 2025 suggest £9.46bn to £12.2bn, reflecting robust demand across the country, especially among London investors and regional developers looking to move decisively.

Lower interest rates from the Bank of England in 2025 have helped improve affordability, and specialist lenders have leaned into flexibility that high-street routes often cannot match on timing. Deals that would stall with traditional underwriting can progress with asset-backed decisions, typically up to 75% loan-to-value, with terms of 3 to 12 months. Average pricing around 0.64% per month has kept bridging competitive versus some commercial and buy-to-let alternatives, particularly when the real cost of delay is factored in.

Speed is the defining advantage. Average completion times are around 43 days, and for clean refinances some lenders can complete in a matter of days, occasionally under 24 hours. That can be the difference between retaining a property, avoiding default charges, or capturing a discounted purchase. Clear exits are vital. Most borrowers repay via a property sale or refinance, often into a buy-to-let or term commercial mortgage once works are finished or accounts are updated. Used well, bridging is a tool for control: you set the timeline to exit on your terms rather than a buyer, a bank, or the market dictating it.

Understanding APR is not just about percentages - it is about what you will pay in real pounds and the opportunity you gain by moving quickly.

Is commercial bridging right for you?

Commercial bridging typically suits UK landlords, developers, and trading businesses that need rapid funds secured against property. If you are managing a maturing facility, completing a refurbishment before refinancing, or bridging to a sale, it can preserve value and buy time. It is also useful for auction purchases with 28-day completion windows, or for chain-break situations where an exit is visible but not yet realised. If you prefer predictability, can evidence a realistic exit, and are comfortable with short-term interest plus fees, bridging can be an efficient solution.

Your bridging routes at a glance

1. Refinance to term loan later - bridge now, shift to commercial or buy-to-let mortgage after.

2. Bridge-to-sale - release equity while marketing the property for disposal.

3. Light refurb bridge - fund improvements, then refinance at a stronger valuation.

4. Auction finance - complete within 28 days, refinance or sell subsequently.

5. Portfolio refinance bridge - consolidate or restructure multiple properties quickly.

6. Development exit bridge - finish works and stabilise income before term refinance.

What it could mean for your bottom line

Who can qualify and what lenders look for

Eligibility is mainly asset-led. Lenders focus on the property’s value, condition, demand, and the credibility of your exit. Up to 75% loan-to-value is common, though lower leverage typically reduces pricing and increases approval odds. Both regulated and unregulated loans exist, with a substantial portion of bridging used for investment properties. Credit history matters, but strong security and clear plans can outweigh historic blips, especially where refinancing or a sale is imminent.

Expect to provide identification, proof of ownership, recent accounts or rental income details, and details of your exit route, such as an agreement in principle for a future mortgage or evidence of marketing for sale. Where refurbishments are involved, lenders usually want a schedule of works, costings, and timelines. Kandoo can help assess your case early, match it to the right lender, and set realistic expectations on pricing and completion speed. The best results come from aligning the loan term with a conservative exit timetable, including buffer time for legals and valuation.

From enquiry to exit: the journey

1. Share your goals, timeline, and exit evidence.

2. Receive indicative terms and initial affordability view.

3. Instruct valuation and solicitors after terms agreed.

4. Complete underwriting with essential document checks.

5. Review the offer, legal charges, and conditions.

6. Draw down funds on completion of legals.

7. Execute your plan - refurbish, market, or stabilise income.

8. Exit via refinance or sale before the term ends.

Speed vs certainty: weighing it up

Key watchpoints before signing

The strongest bridging cases start with a realistic exit timetable. If you intend to refinance, allow time for lender processing, valuers’ diaries, and any lease or title tidying. For sales exits, confirm demand, highlight comparable transactions, and be honest about pricing. Build a cash buffer for interest and fees so that project hiccups do not threaten repayment. Keep communication frequent with your solicitor, broker, and valuer to avoid bottlenecks. If works are required, ensure contractor availability and evidence of costs. Finally, scrutinise early repayment charges, default rates, and any conditions that could restrict your exit. A good broker should model worst-case timing and still show a viable plan.

Alternatives to consider

1. Term commercial mortgage - slower but often cheaper in the long run.

2. Revolving credit facilities - flexible drawdowns for working capital needs.

3. Mezzanine finance - supplements senior debt for higher leverage projects.

4. Equity injection or JV partner - reduces borrowing and interest costs.

Your questions, answered

Q: How fast can a commercial bridge complete? A: Many cases complete in 2 to 6 weeks. Clean refinances can be faster, and in exceptional scenarios funds can be arranged in days.

Q: What interest rate should I expect? A: Market averages are around 0.64% per month, influenced by LTV, asset quality, and borrower profile. Lower leverage and clear exits typically secure sharper pricing.

Q: What are the common exit strategies? A: Most borrowers exit through a property sale or a refinance into buy-to-let or a term commercial mortgage. Smaller proportions move into commercial refinance from the outset.

Q: How much can I borrow against my property? A: Up to 75% loan-to-value is common, subject to valuation, property type, and the strength of your exit. Some cases require lower LTVs for speed or complexity.

Q: Is bridging suitable for refurbishments and auctions? A: Yes. It is widely used for light refurbishments ahead of refinance and for auctions that require 28-day completion. Speed helps secure discounts and avoid penalty charges.

Q: What happens if my exit is delayed? A: Speak to your lender early. Extensions can be possible, but extra costs may apply. Plan conservatively at the outset to reduce deadline risk.

How Kandoo can help

Kandoo is a UK-based retail finance broker that connects you with lenders who move at the pace your project demands. We assess your exit, structure terms that fit your timeline, and manage the valuation and legal steps to keep completion on track. If speed, clarity, and competitive pricing matter, talk to us before the clock starts ticking.

Important information

This guide is for general information only and is not advice. Bridging loans are secured against property and your asset may be at risk if you do not keep up repayments. Terms depend on your circumstances and lender criteria.