Bridging finance for retail units

The high street needs fast capital - bridging delivers

Bridging finance has moved from niche to mainstream for retail properties. Loan books are on track to exceed £12bn in 2025, reflecting greater lender appetite, more product choice, and sharper pricing. For buyers and owners of shops and mixed-use units, that growth translates into practical advantages: faster decisions, more competitive rates, and solutions designed for refurbishment and green upgrades.

Speed matters when opportunities are time-sensitive. Completion times have shortened across the market, with some cases moving from offer to completion in around six weeks, and best-in-class lenders completing faster. That is crucial for auction purchases, breaking a chain, or securing a unit before a rival. At the same time, average monthly interest rates have eased in 2025, with many quotes sitting around two-thirds of a percent per month. The result is a more affordable bridge that buys you time to add value or complete a refinance.

Retail units increasingly need investment to remain viable: light refurbishments, HMO conversions upstairs, or retrofit works to improve EPC ratings. Bridging is well-suited to these value-add plans because it can fund improvements that mainstream lenders prefer to see completed before offering long-term terms. Lenders have responded with specialist and green bridging products that support energy-efficiency upgrades and unusual properties.

Understanding APR is not just about percentages - it is about knowing what you will pay in real terms. We break it down so you can make informed decisions.

Exit planning remains the cornerstone. Most borrowers repay through property sale or a remortgage to a buy-to-let or commercial term facility once works are complete and value uplift is demonstrated. Average loan-to-value sits around the low-50s percentage range, which can help keep monthly costs manageable while works progress. Combine that with clearer product labelling and stronger compliance, and you have a short-term tool that is more transparent and predictable than it was even a couple of years ago.

Use bridging to act with confidence when the right retail opportunity appears - then focus on execution, value creation, and a clean exit.

Who benefits from this type of finance

If you are buying a UK retail unit at auction, facing a tight completion deadline, or refurbishing to lift rent and EPC performance, bridging can be an efficient funding bridge to your long-term plan. Investors converting uppers to residential, owner-occupiers relocating, and small developers packaging mixed-use schemes can leverage speed and flexibility to secure assets that would otherwise slip away. It also suits landlords who need to refinance quickly after a valuation shortfall or where a lease event creates a time-critical window to improve covenant strength before term debt.

Your choices at a glance

1. Auction purchase bridges - fast drawdown to meet 28-day completions.

2. Chain-break funding - secure the unit while term finance is arranged.

3. Refurbishment bridges - light works, layout changes, and reconfiguration.

4. Green bridging - fund EPC upgrades like insulation and new HVAC.

5. Bridge-to-let - acquire, improve, then refinance onto a term mortgage.

6. Conversion bridges - retail with uppers to flats or HMOs.

7. No-valuation or AVM-led bridges - speed-focused for suitable assets.

8. Heavy works specialist bridges - complex structures or planning-led schemes.

What it costs and what it can deliver

Who qualifies and what lenders look for

Eligibility hinges on property type, borrower profile, and a credible exit. Most lenders support high street retail, neighbourhood parades, and mixed-use with residential uppers. Sensitive uses or low footfall locations may attract tighter leverage. Typical loan-to-value sits around 50% to 53% for mid-market cases, with higher leverage available to experienced operators or where the security is prime. Lenders will check planning status, leases, tenant covenant, and the scope of any refurbishment. A clear schedule of works, realistic budget, and contractor plan will strengthen an application.

Your exit is paramount. The most common routes are sale and refinance, including bridge-to-let for mixed-use. Lenders want to see that the exit is achievable within the term, with allowances for marketing time, refinance approvals, and any snagging on works. Personal credit, company structure, and experience matter, but strong security and robust documentation can balance limited track record. As a UK-based broker, Kandoo can match your case to lenders comfortable with your property type, works profile, and timeline, improving the likelihood of a swift, competitive decision.

From enquiry to completion - the practical steps

1. Share property details, timescales, and intended exit route.

2. Provide ID, proof of funds, leases, and outline works scope.

3. Receive an initial decision in principle and pricing.

4. Valuation and legal due diligence are instructed promptly.

5. Final offer issued once reports and legals align.

6. Funds drawn - often via retained interest structure.

7. Complete works and evidence milestones with invoices.

8. Exit via sale or refinance before the end date.

Advantages and trade-offs you should weigh

Read this before you press go

Bridging is a tool to buy time and create value, not a substitute for long-term finance. Your plan should set out a dated timeline, build costs with contingency, and a primary and backup exit. Consider regional dynamics: London and major GB cities move faster and reward speed, while secondary towns may require longer marketing windows to sell or re-let. Lenders will price for risk, so transparency helps - disclose works scopes, tenant situations, and planning assumptions early. Finally, factor total cost of capital, not just headline rate. Arrangement fees, interest retention, legal costs, and extension fees should be modelled against expected value uplift. If the numbers still work on conservative assumptions, you are in a strong position.

Alternatives if bridging is not the right fit

1. Commercial term mortgage - slower but lower-cost long-term funding.

2. Development finance - staged drawdowns for heavier works and ground-up.

3. Secured business loan - shorter terms for modest refurbishments.

4. Mezzanine finance - top-up behind senior debt to increase leverage.

5. Equity or joint venture - share risk and reduce borrowing costs.

6. Vendor financing - negotiated terms with the seller for part of the price.

Frequently asked questions

Q: How fast can a retail bridge complete? A: Straightforward cases can complete in roughly one to six weeks depending on valuation, legal complexity, and borrower readiness. Early document preparation is the single biggest accelerator.

Q: What interest rates should I expect in 2025? A: Many cases are pricing around two-thirds to four-fifths of a percent per month, with variation by asset quality, geography, and borrower experience. All-in cost depends on fees and term length.

Q: What loan-to-value is typical for retail units? A: Mid-market averages sit around the low-50s percentage range. Some lenders go higher for experienced operators or prime assets, while secondary locations may see tighter leverage.

Q: What are common exits for retail unit bridges? A: Most borrowers exit via sale or refinance. Bridge-to-let remains popular for mixed-use, with term debt taken once works complete and rental income stabilises.

Q: Can I fund EPC improvements with a bridge? A: Yes. Green bridging products support insulation, glazing, heating systems, and other upgrades designed to lift EPC ratings, often with pricing incentives or streamlined processes.

Q: Is this regulated by the FCA? A: Loans to individuals secured on a property you or a close family member will live in can be regulated. Many commercial bridges are unregulated. Clear product labelling and advice are essential.

How Kandoo helps you move first and finish well

Kandoo is a UK-based retail finance broker with access to specialist bridging lenders across Great Britain. We compare options, structure terms to suit your plan, and prioritise speed without losing diligence. From auction day to refinance, we coordinate valuations, legal steps, and drawdowns so you can focus on works and tenants. Speak to us today for a tailored illustration and timeline.

Next step: request an indicative quote with your timescale, property details, and exit plan.

Important information

This guide is for information only and is not personal advice. Bridging finance is secured against your property and carries risks if the exit is not achieved. Terms and eligibility vary by lender and your circumstances. Always seek professional advice before committing.