Bridging finance for expansion plans

Updated

Dec 13, 2025 9:12 PM

Written by Nathan Cafearo

A clear guide to using UK bridging finance for expansion, with costs, timelines, eligibility, and practical steps to secure competitive terms through a trusted broker.

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Why bridging could accelerate your next move

The UK bridging market has carried strong momentum into 2025. Loan books moved beyond £10bn in 2024 and forecasts suggested around £12.2bn for 2025, reflecting deeper lender capacity and sustained demand. Quarterly completions hit records at the end of 2024, while application volumes have kept rising this year, helped by sharper pricing and more product choice. For businesses and investors, that translates into better odds of securing fast, tactical capital when timing is critical.

Rates have eased in 2025, with average monthly pricing edging down and some quotes reported near 0.64% per month on straightforward cases. Execution is moving faster too, with average completions around the mid-30 to low-40 day mark depending on case complexity. When you are trying to secure a property quickly, fund a refurbishment, or bridge to a long-term mortgage, shaving weeks off the timeline can make the difference between winning and missing the opportunity.

The use cases have broadened well beyond simple chain-breaks. Expansion-led purchases, regulated refinance, light-to-heavy refurbishments, HMOs, and commercial-to-residential conversions have all gained traction. Lenders are innovating with options like green bridging and selected no-valuation products on lower-risk scenarios. Yet underwriting standards remain disciplined. Expect lenders to scrutinise your exit strategy, valuation evidence, and the credibility of your project team. Typical loan-to-value sits in the low-to-mid 50% range, with specialist lenders stretching to 70-75% where the assets and plan support the risk.

Understanding APR is not just about percentages - it is about what you will pay in real terms. Bridging interest is usually quoted monthly, so the effective cost depends on how long you draw the facility and whether interest is retained, rolled up, or serviced. Add arrangement, legal, valuation and exit fees, and you have the true price. With stable base rates and improving swap curves, pricing has been competitive in 2025, but it still responds quickly to market moves. If a deal stacks up, moving decisively can protect terms.

The speed of bridging can be a strategic advantage - provided your exit is credible and documented.

Bridging is not for every scenario. It suits time-sensitive acquisitions and value-adding projects where short-term capital unlocks a stronger long-term position. The key is selecting the right lender for your asset type and exit route, and preparing a clean, lender-ready file from day one.

Who benefits most

If you are a UK property investor, developer, or business owner pursuing growth, bridging can provide the liquidity to move first and tidy up the structure later. It is well suited to auction purchases, buy-before-sell strategies, refurbishments that enhance value, and securing sites ahead of planning. Homeowners using regulated bridging to complete a move may also benefit, provided there is a clear sale or remortgage exit. For complex commercial cases, an experienced broker can match the nuances of your project to lenders comfortable with your risk profile and timeline.

Your funding routes

Standard unregulated bridging - for investment and commercial purposes with flexible terms.
Regulated bridging - for cases where the borrower or family will occupy the property.
Light refurbishment bridging - cosmetic or non-structural works with quick draws.
Heavy refurbishment or conversion - structural changes, commercial-to-residential, planning-led.
Development exit bridging - stabilise and market a completed scheme before sale or refinance.
Auction finance - pre-approved facilities to meet 28-day deadlines.
Green bridging - incentives for energy-efficiency improvements or greener assets.

Cost, impact, returns and risks

Factor	Typical range or detail	What it means for you
Interest cost	Around 0.64% to 0.9% per month, case-dependent	Lower monthly rates in 2025 improve affordability over short holds
Fees	Arrangement 1-2%, legal, valuation, exit fee 0-2%	Total cost includes all fees - build these into the appraisal
LTV	Commonly low-to-mid 50%, up to 70-75% on select deals	Higher LTV may be possible with strong assets and exit plan
Timeline	About 32-43 days on average in 2025	Faster completions reduce execution risk on time-critical acquisitions
Impact on project	Rapid acquisition and early works start	Brings forward value uplift and rental or sales timelines
Returns	Driven by value add, yield improvement, or purchase discount	Short-term cost is justified if post-works value or cashflow rises
Risks	Exit delays, cost overruns, market repricing	Mitigate with contingency, fixed quotes, and alternative exit routes

Do you qualify

Eligibility varies by lender but tends to focus on asset quality, repayment certainty, and borrower profile. Expect close attention on the exit route - property sale, buy-to-let remortgage, or commercial refinance are the mainstays, with sale still the most common. Lenders will want evidence that the asset supports the loan amount at the proposed LTV, typically via an RICS valuation, and that your plan is achievable within the term. For refurbishment or conversion, they will assess the scope of works, contractor experience, and planning status. Credit history matters, but strong security and a robust exit can offset minor issues. Income assessment differs by product; many lenders allow interest to be retained or rolled, reducing monthly cashflow pressure. If you are unsure which route fits, Kandoo can help package your case so it meets lender expectations first time, improving pricing and speed.

From enquiry to funds - the steps

Share the asset, loan amount, term, and exit plan.
Receive indicative terms and lender short-list.
Instruct valuation and start legal due diligence.
Finalise works schedule and evidence of costs.
Provide ID, company docs, and source of funds.
Lender underwrites and issues formal offer.
Complete legal checks and sign facility documents.
Draw down funds and commence the project.

Strengths and trade-offs

Pros	Cons
Speed - typical completions around 32-43 days	Higher cost than long-term mortgages
Flexible use - purchase, refurb, refinance, conversions	Short terms require disciplined exit planning
Broad LTV range with specialist options up to 70-75%	Valuation and legal costs payable upfront
Product variety including green and no-valuation cases	Pricing can change with market moves

Points to check before you commit

Timing matters. Pricing has been favourable amid base-rate stability, but lenders reprice quickly if swap rates move. Lock terms promptly once you are confident in the numbers. Check whether interest is retained, rolled up, or serviced, and model total cost for your expected hold period. Confirm fees in writing and budget for valuation, legal, and exit charges. Build a realistic contingency for works and timescales, as delays can erode returns or strain the exit. If your exit is a sale, validate the demand and pricing assumptions with agent comparables. If you plan to refinance, ensure the future lender’s criteria are achievable and your projected DSCR stands up. Keep documentation current - planning approvals, build contracts, and warranties can materially affect underwriting confidence.

Alternative routes to consider

Term commercial mortgage - lower cost for stabilised assets.
Buy-to-let mortgage - for income-producing residential investments.
Development finance - ground-up construction or major structural works.
Second charge bridging - unlock equity while retaining a first mortgage.
Business loan or asset finance - for non-property expenditure.
Mezzanine finance - top up leverage alongside senior debt.

FAQs

Q: How long does a bridging loan take to complete? A: In 2025, many cases complete in roughly 32-43 days, depending on valuation, legal complexity, and the clarity of the exit plan.

Q: What loan-to-value can I expect? A: Average LTVs sit in the low-to-mid 50% range, with specialist lenders sometimes offering 70-75% on strong assets and well-documented exits.

Q: Do I need to service the interest monthly? A: Not always. Many facilities allow retained or rolled-up interest, improving cashflow. Servicing may reduce total interest if your free cash allows.

Q: What are typical exit routes? A: Most loans exit via sale, with a meaningful share refinanced onto buy-to-let or commercial mortgages. Lenders assess exit certainty carefully.

Q: Are rates fixed for the term? A: Many offers are fixed for the facility period once issued, but terms are sensitive to market conditions until completion. Moving quickly helps secure pricing.

Q: Can I use bridging for refurbishments and conversions? A: Yes. Light and heavy refurbishment products are widely available, and lender appetite for commercial-to-residential conversions has increased in 2025.

How Kandoo helps you move faster

Kandoo is a UK-based retail finance broker that connects you with a panel of specialist bridging lenders. We help shape your case, align the LTV and exit to lender appetite, and streamline valuation and legal milestones. You get competitive quotes quickly, clear comparisons, and a smoother path to completion.

Next step: Speak to Kandoo for indicative terms and a lender-ready checklist today.

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 fail to repay. Terms depend on your circumstances and lender criteria.