Bridging finance for refurbishment of business premises

Why bridging can power your refurbishment timeline

Bridging finance exists to solve one problem brilliantly - speed with certainty. If you need to refurbish a shop, office or light industrial unit and cannot wait weeks for a traditional loan, a bridge can fund works in days. In the last two years, the UK bridging market expanded to multi-billion size, with more lenders, deeper funding lines and a wider choice of products. That liquidity matters. It means more competition on turnaround and increasingly tailored terms for real-world projects.

For refurbishment, lenders prioritise the value of the asset today and the value it will have post-works, alongside a credible exit plan. Instead of assessing you only on a long credit file, they look closely at the property, the programme of works and how you will repay - usually via refinance onto a commercial mortgage or by sale once the uplift is achieved. Many products now accommodate staged releases, rolled-up interest and partial redemptions to match cashflow.

Speed is the core advantage. Commercial bridges can complete in a handful of days where the case is clean, legal due diligence is ready and the valuer can inspect quickly. For auction purchases, lease-driven fit-outs or re-opening deadlines, that can be the difference between capturing value and missing it.

The trade-off is price. Bridging rates sit higher than mainstream mortgages and fees are more involved, reflecting faster decisioning and higher perceived risk. The decision is therefore pragmatic: will the refurbishment uplift outweigh the total funded cost within your time window, with a back-up plan if market conditions shift? If you model the numbers carefully, and set your exit early, bridging can be the right tool for targeted commercial improvements across England, Scotland and Wales.

The best bridging deals start with a clear exit and an honest budget.

If timing is critical and the works add measurable value, bridging can turn a viable plan into a completed project.

Who this suits and when it shines

Bridging is suitable for UK businesses, landlords and owner-occupiers who need short-term capital to buy or improve commercial or mixed-use premises. It fits cases where a refurbishment programme will enhance value or income quickly and there is a defined route to repayment within 6 to 24 months. Typical scenarios include auction wins requiring immediate completion, chain breaks delaying conventional funding, development exit when you need time to let units, and phased refurbishments where staged drawdowns align with build milestones.

It is less suitable if you cannot evidence a credible refinance or sale, or if planning risks are unresolved. Where the property is specialised or the tenancy profile is weak, expect more scrutiny. A whole-of-market broker can help you set realistic expectations and select lenders comfortable with your property type and business plan.

Your funding routes at a glance

1. Light refurbishment bridge - cosmetic improvements, services intact, faster legals.

2. Heavy refurbishment bridge - structural changes, planning or building control required.

3. Auction bridge - rapid completion followed by staged works funding.

4. Development exit bridge - refinance completed or near-complete works for breathing space.

5. Staged drawdown bridge - releases tied to QS certificates or valuation milestones.

6. Second charge bridge - leverage existing first mortgage where equity allows.

Cost, impact, returns and risks

What lenders look for and how to position your case

Eligibility is anchored in the asset and the exit. Lenders want a professional valuation, a works schedule with realistic costs, and evidence of any planning or building control requirements. They will underwrite against current value and the anticipated value after refurbishment, then assess your exit route - a term commercial mortgage or a sale with comparable evidence. Your experience and the contractor’s track record help, but strong documentation can balance limited experience.

Expect legal due diligence to be more involved than consumer bridges, particularly for leases, titles, existing charges and any landlord and tenant considerations. If you are carrying out intrusive works, lenders may require staged releases against certificates or interim valuations. Across Great Britain, jurisdictional differences can affect process and timescales, so use a UK commercial solicitor who closes bridging transactions regularly.

If you work with Kandoo, we organise a whole-of-market search, coordinate valuation and legal instructions early, and shape the proposal so lenders can approve without unnecessary conditions. That reduces rework, speeds completion and helps keep costs predictable.

From enquiry to drawdown - the practical steps

1. Share your property details, budget and exit plan.

2. Whole-of-market search and indicative terms sourced.

3. Instruct valuation and solicitors in parallel early.

4. Provide works schedule, consents and contractor details.

5. Lender underwrites against current and after-works value.

6. Legal due diligence, searches and conditions satisfied.

7. Funds released - initial or staged drawdowns as agreed.

8. Monitor progress, report milestones, prepare refinance or sale.

Weighing it up - advantages and trade-offs

Key checks before you commit

Build your budget from the ground up. Include contingency for materials, contractor availability and professional fees, then model interest and all lender charges to the planned redemption date. Stress-test your exit against slower lettings or a softer valuation. Ensure planning, licensing and landlord approvals are in place before you draw funds, and align your programme of works with any staged release conditions.

Engage your solicitor, valuer and broker early so legals, valuation and underwriting move in parallel. Where the asset is mixed-use or has shorter leases, make sure tenant covenants, lease lengths and EPC position meet the expectations of your intended refinance lender. A conservative approach now prevents expensive changes later.

Alternatives you might consider

1. Term commercial mortgage with refurbishment allowance.

2. Asset finance for equipment and fit-out items.

3. Revolving credit facility or overdraft for working capital.

4. Development finance if works are ground-up or structural.

5. Vendor financing or deferred consideration on purchase.

Frequently asked questions

Q: How quickly can a commercial bridge complete? A: Clean cases with ready legals and fast valuation can complete within a few days. Most transactions take 1 to 3 weeks depending on searches, consents and third party responsiveness.

Q: What loan-to-value is realistic for refurbishment? A: Many lenders cap at 70 to 75 percent of current or after-works value depending on the asset, borrower experience and the exit. Expect case-by-case assessment and regional valuation nuances.

Q: Do I have to service the interest monthly? A: Not necessarily. You can often roll up interest to redemption, service it monthly, or blend both. Choose the option that fits project cashflow and keeps the exit achievable.

Q: What fees should I budget for beyond interest? A: Arrangement and exit fees, valuation, legal fees for both sides, and potentially monitoring or QS costs for staged releases. Include drawdown fees and notice periods on redemption.

Q: Can I refinance if the market changes? A: Lenders expect contingency. You can extend or refinance the bridge if covenants are met, but build buffer time into your term and keep documentation ready to support a term mortgage.

Q: Will poor credit stop me obtaining a bridge? A: Not automatically. Lenders prioritise the asset, the works and the exit plan. However, adverse credit will influence pricing and conditions, so transparency helps structure the case.

How Kandoo helps you move faster

Kandoo is a UK-based retail finance broker with whole-of-market access to specialist bridging lenders. We structure your proposal, organise valuation and legal work in parallel, and negotiate staged releases and interest options that match your programme. Our role is to bring speed with clarity, so you can focus on the refurbishment while we keep the finance moving.

Next step: share your property, budget and exit plan to receive indicative terms today.

Important information

Bridging finance is a short-term, secured loan that may be more expensive than long-term borrowing. Your property may be at risk if you do not keep up repayments. Seek independent legal, tax and accounting advice. Terms and availability vary across England, Scotland and Wales and are subject to change.