Bridging finance for industrial units

Industrial capital at speed, without the guesswork

Bridging finance is short‑term funding designed to move at the pace of the deal. For industrial unit buyers and owners, that can mean completing in weeks rather than months, securing a site before competitors, and unlocking value through targeted refurbishment. In 2025, the UK bridging market has rebounded with stronger volumes and quicker completions. Gross bridging lending reached about £209.4 million in Q3 2025, up 4.9% on the previous quarter and the highest level since late 2024. Average completion times have shortened to around 41 days, and typical loan‑to‑value ratios nudged up to roughly 55%.

Scale matters. The total UK bridging loan book is expected to pass £12 billion this year, after record completions in 2024. A larger market usually means more lenders, sharper pricing, and product options tailored to specific use cases like light industrial refurbishments or logistics upgrades. That aligns with a notable shift in demand, where investment purchases have taken a bigger share of bridging activity as buyers act quickly on off‑market or time‑sensitive opportunities.

Pricing has become more competitive too. Average monthly bridging rates have edged down in 2025, while application volumes have risen year on year. Lenders are also innovating. Green bridging facilities, no‑valuation or desktop‑valuation options, and more digital underwriting are increasingly common, all aimed at shaving days off timelines and supporting capex that boosts energy efficiency and asset performance.

None of this removes risk. Base rate movements, inflation and sector‑specific demand can affect refinancing and exit strategies. The key is disciplined modelling of total cost and clear contingency planning. Bridging is a tool, not a strategy on its own. Used well, it can help industrial operators acquire, refurbish and stabilise assets so that long‑term finance or a sale can follow naturally.

Understanding APR is not just about percentages - it is about what you pay in real pounds. Model your exit, timeline and holding costs before you commit.

Who benefits from this funding?

If you are buying a UK industrial unit at auction, securing a last‑mile logistics site in a competitive bid, or refurbishing a vacant warehouse to lift rent and EPC performance, bridging can provide the speed and flexibility traditional term loans often cannot. It suits investors and operators needing quick certainty of funds, developers working under time pressure on light or heavy refurbishments, and landlords bridging a chain break between sale and purchase. It can also support permitted development conversions where planning or works timing makes mainstream lending difficult at the outset. For established owners, it can help release equity for capex such as racking, EV charging, or solar to improve running costs and covenant strength ahead of refinance.

Your funding choices

1. Purchase bridge - short‑term loan to acquire an industrial unit quickly, often for auction or off‑market deals.

2. Light refurbishment bridge - funds minor works like reconfiguration, racking, LED upgrades or small office fit‑outs.

3. Heavy refurbishment bridge - covers structural changes, roof replacements, loading bay alterations or utility upgrades.

4. Development exit bridge - refinances a completed or near‑completed scheme to buy time for lettings or sale.

5. Permitted development conversion bridge - for change of use where planning is favourable or light works are required.

6. Green bridging - supports energy‑efficiency upgrades such as solar PV, insulation, heat pumps or EV infrastructure.

7. No‑valuation or desktop‑valuation bridge - speeds up underwriting where asset data supports faster decisions.

What it costs and what it delivers

Can you qualify?

Eligibility hinges on a credible asset, a defined use of funds and a realistic exit. Lenders will look for a strong case for the property and a borrower with the experience or advisory support to deliver the plan. Expect to evidence purchase details, planning or permitted development status if relevant, works scope and budget, professional reports for structural items, and a timeline that allows for contingencies. Valuation and legal due diligence must support the numbers, including rental assumptions and comparable sales.

Where the loan is unregulated commercial bridging, lenders focus on the asset and business plan rather than personal affordability, though directors’ guarantees are common. Where residential security or regulated circumstances are involved, affordability and consumer protection rules apply. Typical leverage for industrial assets sits around the mid‑50% LTV area, with higher leverage available in selective cases where risks are clearly mitigated. Kandoo can help package your application with the right documents, highlight strengths in the asset story and line up a viable refinance or sale pathway that satisfies lender risk criteria.

From enquiry to funds in the bank

1. Share the asset details and required timeline.

2. Receive indicative terms and discuss assumptions.

3. Instruct valuation, legal checks and surveys.

4. Finalise works scope, costs and exit plan.

5. Underwriting reviews documents and conditions.

6. Sign loan offer and complete legals.

7. Draw down funds and start works.

8. Monitor progress and prepare refinance or sale.

Advantages and watch‑outs

Before you sign on the dotted line

Stress‑test your project at conservative rental and exit yields. Model interest, fees and contingency against realistic program timings, not best‑case assumptions. Build in float for surveys, utilities and contractor availability. If your plan relies on refinancing, speak to prospective term lenders early and understand covenants, debt service metrics and any EPC thresholds. For sales exits, scrutinise demand from local occupiers and investors, and allow for due diligence periods. Get legal searches underway promptly and resolve title or access points before exchange. Have backup liquidity for small cost overruns, and agree reporting and drawdown processes with the lender so that works are not delayed by paperwork.

Consider these alternatives

1. Term commercial mortgage - slower to arrange but lower cost for stabilised assets.

2. Asset finance - fund machinery or racking separately to preserve property budget.

3. Mezzanine finance - top up equity where senior LTV is capped.

4. Invoice finance - support working capital during refurbishment or lease‑up.

5. JV equity or profit share - reduce leverage in exchange for upside participation.

FAQs

Q: How fast can a bridging loan complete for an industrial unit? A: Well‑prepared cases can complete in roughly 4 to 6 weeks, sometimes faster where desktop valuations and efficient legals are possible.

Q: What loan‑to‑value should I expect? A: Many lenders target around the mid‑50% LTV range for industrial assets, with adjustments for location, tenant profile, works complexity and exit route.

Q: Are rates fixed for the term? A: Bridging rates are typically variable or set at a monthly margin. Focus on total cost, including fees and any extension pricing, not just the headline rate.

Q: Can I finance refurbishment costs? A: Yes. Light and heavy refurbishment bridges can include works budgets released in drawdowns against milestones and monitoring reports.

Q: What is green bridging and why consider it? A: Green bridging links funding to energy‑efficiency improvements like solar, insulation or LED lighting. It can enhance EPCs, reduce running costs and improve refinance options.

Q: What if my refinance is delayed? A: Discuss extensions early and review alternative exits. Cost up extension fees and ensure you have contingency to avoid forced sales.

How Kandoo helps you move first

Kandoo is a UK‑based retail finance broker with access to a panel of specialist lenders. We structure applications for speed, price and flexibility, matching your industrial asset and exit plan to lenders with appetite today. We can coordinate valuation, legal and monitoring requirements so drawdowns stay on track and you can focus on delivering the business plan.

Important information

This guide is for general information only and is not advice. Bridging loans are secured and your property may be repossessed if you do not keep up repayments. Product availability, pricing and eligibility vary by lender and circumstances.