Bridging finance for payroll support

A clear runway to payday

For many UK employers, payroll is the one payment you cannot miss. Policy changes like National Insurance increases and minimum wage uplifts have lifted wage bills, while delayed receipts and seasonal dips keep cashflow under pressure. When timing, not trading, is the problem, a short-term bridge can keep your team paid and your reputation intact.

Bridging finance has matured into a practical emergency tool. UK brokers increasingly complete transactions within 24 to 72 hours, sometimes the same day, often secured against property owned by the business or directors and structured over a few months. In 2025, the market is larger and more liquid, with lenders competing on speed and pricing. Average monthly rates have softened, with many quotes starting around 0.65 to 0.75 per cent, improving affordability compared with last year.

What makes bridging suitable for payroll is underwriting that focuses on asset value and a clear exit strategy, rather than recent profit volatility. Lenders want to know the property is sound and that you have a realistic plan to repay from a sale, refinancing, or incoming receivables. Product features matter too. Loan-to-value caps around 75 per cent and choices like rolled-up or retained interest directly affect how much cash actually lands in your account on day one.

Paying your people on time protects morale and brand equity. A well-structured bridge buys you days or weeks to complete a sale, collect invoices, or refinance.

If bridging is not the right fit, sector-specific solutions exist. Recruitment finance, for example, can advance up to 95 per cent of invoice value and can be set up within days. For timesheet-heavy firms, a revolving facility that integrates payroll can be cheaper and better matched to ongoing needs.

Speed is decisive. Price is crucial. Structure is everything.

Who should consider this?

Bridging for payroll suits UK businesses with a temporary cashflow gap and a valuable property asset to secure against. It is particularly relevant where a confirmed exit is visible - a property sale in progress, a refinance offer pending, or large, contracted invoices due. Directors willing to secure using their residential property should first check regulatory status and personal risk. Firms in recruitment, staffing and care with recurring payroll needs may find invoice-based facilities more appropriate than property-backed debt. If you need funds this week, have evidence of an exit, and value rapid execution, bridging can be a tactical solution.

Your funding routes at a glance

1. Bridging loan - short-term, property-secured funding for urgent payroll.

2. Regulated bridging - if the security is a primary residence, with extra protections.

3. Unregulated bridging - often used for company assets or investment property.

4. Recruitment finance - invoice advances tailored to payroll-heavy sectors.

5. Invoice finance - broader facility to accelerate debtor receipts.

6. Business overdraft - revolving bank limit, slower to arrange for many SMEs.

7. Merchant cash advance - repayments linked to card takings, faster but costlier.

Next step: shortlist two to three routes, then model net day-one cash and total cost for each.

Pounds and priorities - what to weigh up

Can you qualify?

Eligibility for payroll bridging is grounded in the quality of your security and the strength of your exit. Lenders will prioritise property value, title, and any existing charges, alongside a credible repayment route. If you plan to repay from a property sale, they will expect a listing, proof of buyer interest, or solicitor correspondence. If you intend to refinance, a decision in principle or broker pathway helps. For repayment from receivables, show contracts, invoices, or an invoice finance term sheet.

Directors may offer residential property as security. Where the home is a primary residence, the facility may be regulated, which changes paperwork, advice requirements and timeline. Commercial or investment property is typically unregulated. Understanding regulatory status early avoids delays.

Kandoo works with a broad panel across the UK bridging market, including lenders that complete at weekends and offer flexible interest structures. We assess LTV, affordability on exit, and how fees and retained interest affect your net day-one funds, ensuring the facility actually covers the payroll number you must hit.

Funding in days - a pragmatic sequence

1. Confirm payroll shortfall and exact date required.

2. Identify security and gather title and mortgage statements.

3. Evidence exit - sale, refinance, or receivables documentation.

4. Choose interest structure to maximise day-one cash.

5. Submit application via broker with ID and KYC pack.

6. Valuation or desktop review and legal due diligence.

7. Sign documents and draw funds to meet payroll.

Advantages and cautions side by side

Before you commit

Speed should not come at the cost of clarity. Verify regulatory status if a residential home is involved, and understand every fee before signing. Model two scenarios: retained interest and rolled-up interest. The first reduces funds at completion; the second increases the balance at redemption. Check whether a no-valuation pathway is available and whether it meaningfully improves timing for your case. Align the loan term with the most conservative view of your exit date, not the optimistic one. If payroll pressure is recurring rather than one-off, a revolving invoice facility may deliver a lower all-in cost and better operational fit.

Aim for certainty: the right structure delivers the right cash on the right day.

Alternatives to weigh

1. Recruitment finance - up to 95% advance, integrates payroll processing for agencies.

2. Invoice discounting - accelerates debtor receipts without property security.

3. Asset refinance - release equity from vehicles, plant or equipment.

4. Business overdraft - low-friction once set, slower to arrange initially.

5. Merchant cash advance - fast, but typically higher effective cost.

6. Time-to-pay with HMRC - eases PAYE or VAT pressure if arrears loom.

FAQs

Q: How quickly can a payroll bridge complete? A: With the right documents and clear security, many cases complete within 24 to 72 hours. Some private lenders can move faster, especially with desktop valuations.

Q: What rate should I expect in 2025? A: Average monthly rates have softened, with many lenders quoting around 0.65 to 0.75 per cent, depending on LTV, security type and borrower profile.

Q: How much can I borrow against property? A: Up to around 75 per cent loan-to-value is common. Existing mortgages and charges reduce the available headroom for a payroll draw.

Q: Will poor recent trading stop approval? A: Not necessarily. Bridging focuses on asset value and a credible exit strategy. Evidence of sale, refinance, or contracted receivables often matters more than recent profit.

Q: Should I choose retained or rolled-up interest? A: Retained interest is deducted up-front, reducing day-one cash but stabilising monthly cashflow. Rolled-up preserves day-one funds and adds interest to the balance on exit.

Q: Is a residential security regulated? A: If the property is a primary home, regulation may apply, which affects process and timing. Commercial or investment properties are usually unregulated.

Q: Are there better options for ongoing payroll? A: For timesheet-heavy sectors, recruitment or invoice finance can directly fund wages at lower all-in cost, and can be established within days.

How Kandoo can help

Kandoo is a UK-based retail finance broker with access to a wide lender panel across bridging and working capital products. We move quickly, model your net day-one cash, and structure the facility around your exit. If bridging is not the best fit, we can source invoice or recruitment finance designed to fund payroll reliably. Speak to us before payday pressure escalates.

Important information

This guide is for general information only and is not advice. Product availability, rates and eligibility depend on your circumstances and security. If a residential property is involved, confirm whether regulation applies. Always read the lender agreement and seek independent advice where appropriate.