Bridging finance for shops

Updated

Dec 13, 2025 9:05 PM

Written by Nathan Cafearo

A clear guide to bridging loans for shops, with costs, timelines, eligibility, and practical steps. Learn how fast funding can help you secure, renovate, or refinance retail properties.

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The retail-ready bridge to your next opportunity

Bridging finance is designed to move at the speed of the high street. When a shop unit appears at auction, a landlord agrees to a tight completion window, or your refurbishment needs immediate capital, a short-term bridge can provide funds quickly and cleanly while you arrange a longer-term solution. Recent UK market data points to a sector that is both liquid and efficient, with completions in Q1 2025 matching record highs and applications surging well above seasonal norms. For shop owners and investors, that means depth of choice and competition on rates.

Understanding APR is not just about percentages - it is about what you pay in real terms. Bridging typically quotes a monthly rate, so translating that into a total cost over the term is key. Average monthly rates fell to around 0.81% in Q2 2025 across the broader market, with some specialist cases lower or higher depending on risk, property type, and exit plan. Processing times are tightening too. Some lenders have recently averaged just over a month from application to completion, and well-structured cases are moving faster when valuations and legal work are lined up.

The trend matters for shops because retail windows of opportunity rarely stay open for long. A growing share of bridging supports investment purchases and swift refinances, while regulated activity has risen as owners secure residential-linked commercial assets. Average loan sizes around the mid-six-figure mark reflect the realities of purchasing or upgrading premises in busy UK locations. With loan books expected to expand further this year, the market’s direction is supportive of retailers who need certainty of funds without waiting for traditional mortgages. If you know your exit - a sale, a refinance to a term loan, or a remortgage on a buy-to-let basis - bridging can be the flexible tool that gets the deal over the line.

Who benefits most from this type of funding

Bridging loans suit UK shop owners, franchisees, and property investors who need to move quickly and value clear timelines. If you are bidding at auction, facing a chain break, or tackling a refurbishment that will unlock higher footfall and rental yield, bridging can provide targeted capital with minimal delay. It is also useful for landlords consolidating portfolios or switching units to more viable locations, where timing is critical and traditional lenders may require extensive documentation.

This route works best when the exit is credible and time-bound. If you have an agreement in principle for longer-term borrowing after works complete, or a realistic sale route, you are positioned to use bridging efficiently. For mixed-use and residential-linked commercial purchases, regulated options exist when appropriate, offering consumer protections alongside speed.

Your funding routes at a glance

Standard unregulated bridge - for pure commercial acquisitions or short-term refinancing.
Regulated bridge - for residential-linked commercial purchases or where consumer regulation applies.
Auction finance bridge - pre-approved facilities geared to fast auction completions.
Light refurbishment bridge - smaller works such as reconfiguring layouts or compliance upgrades.
Heavy refurbishment bridge - structural changes and material improvements with staged drawdowns.
Development exit bridge - refinance from development funding while marketing or stabilising income.
Bridge-to-let or bridge-to-term - short-term finance with a planned remortgage to a long-term product.

Costs, timelines, returns, and risk profile

Aspect	Typical Range	What to Consider	Real-World Impact
Monthly interest	0.64% - 0.90%	Rate depends on LTV, asset, and exit plan. Falling averages signal competition.	Lower monthly cost improves holding period cashflow and deal viability.
Fees	1% - 2% arrangement, plus legal, valuation	Factor broker, lender, and professional fees into net proceeds.	Upfront costs can be offset by faster completion and negotiated purchase price.
Term length	3 - 18 months	Choose a term that comfortably covers works and refinance timelines.	Adequate runway reduces forced sales and protects margin.
Completion time	32 - 43 days typical	Faster when docs, valuations, and legals are ready early.	Speed lets you secure properties before rivals and meet strict deadlines.
LTV	50% - 70% common	Conservative LTVs sharpen pricing and approval odds.	Lower leverage can mean cheaper rates and smoother exit routes.
Potential returns	Discounted purchase, uplift after works	Model net gains after interest and fees, not just gross uplift.	Well-costed refurbishments can outpace finance costs comfortably.
Key risks	Exit delays, market shifts, cost overruns	Stress-test sale values, rent, and timelines. Secure contingencies.	Robust planning preserves equity and avoids default charges.

Who qualifies and on what basis

Eligibility rests on the strength of the asset and the plausibility of your exit. Lenders will look at the property’s value, location, and condition, along with your intended use and the scale of works if refurbishment is planned. A clear exit is essential - most shop borrowers will refinance to a term facility after trading stabilises or sell once value has been added. Sensible loan-to-value is equally important. Many successful cases land around the low to mid-50s LTV, which typically unlocks better rates and faster credit decisions.

Income and experience help but do not always need to be perfect. If you can demonstrate a track record in retail operations or property projects, alongside realistic forecasts, you will strengthen your application. Legal readiness speeds things up: having titles, leases, planning status, and building control information to hand shortens underwriting. If your property blends residential and commercial elements, regulated options may apply. As a UK-based broker, Kandoo can assess your circumstances quickly, shortlist lenders aligned to your goals, and coordinate valuations and legal work so you can complete within the timeframes the market now regularly achieves.

From enquiry to completion - the fast-track path

Outline your target property and exit strategy clearly.
Share titles, leases, planning, and asset details promptly.
Secure an agreement in principle with realistic terms.
Instruct valuation and legal representation without delay.
Final underwriting checks and facility letter issued.
Review conditions, sign documents, and arrange completion funds.
Draw down funds to meet purchase or refurbishment timeline.
Execute works or refinance, then settle the bridge.

The balance sheet view - advantages and trade-offs

Pros	Cons
Rapid access to capital in 32 - 43 days typical	Higher cost than long-term mortgages if held too long
Flexible use - purchase, refinance, refurbishment	Exit risk if sale or refinance is delayed
Competitive rates trending around 0.81% monthly	Fees add to total cost - plan cashflows
Strong lender appetite and growing loan books	LTV caps may limit maximum leverage
Works well for auctions and time-critical deals	Valuation or legal issues can slow completion

Before you commit - read the small print carefully

Speed is only helpful if the numbers hold up. Model best, base, and stressed outcomes before proceeding, paying close attention to rate, fees, and the length of time you expect to hold the bridge. Ensure your exit is realistic and track the progress of any longer-term mortgage application in parallel with works. Build a contingency for legal, valuation, and contractor costs, and confirm planning or licensing requirements early, especially for change of use or late trading. If you are purchasing at auction, know your completion deadline and what happens if there are delays outside your control. A pragmatic approach is to prepare documents upfront and respond quickly to lender queries so you can benefit from the market’s faster processing without sacrificing due diligence.

Alternatives if a bridge is not the right fit

Commercial mortgage - longer-term funding with lower rates, slower to arrange.
Business loan or revolving credit - unsecured or lightly secured working capital.
Asset finance - fund fixtures, fittings, and equipment separately from the property.
Development finance - suitable for structural projects and ground-up builds.
Mezzanine finance - top up funding where senior LTV is constrained.

Frequently asked questions

Q: How quickly can a bridging loan for a shop complete? A: Many cases complete within five to six weeks, with recent market averages reported as low as 32 days in some quarters. Preparation and fast legals are the main accelerators.

Q: What rates should I expect to pay? A: Typical monthly rates range from around 0.64% to 0.90%, depending on LTV, asset quality, and exit. Falling averages point to competitive pricing, but case specifics drive the final offer.

Q: How much can I borrow against a retail property? A: Loan-to-value commonly sits between 50% and 70%. Lower LTVs often secure better rates and a smoother approval process, particularly for refurbishment projects.

Q: What are the usual exits for shop bridging? A: The most common exits are sale after improvement or refinance to a term mortgage, including buy-to-let or commercial options once trading or lease terms stabilise.

Q: Will I need a valuation and legal work? A: Yes. An independent valuation and lender-led legal process are standard. Instructing both early avoids bottlenecks and helps you meet tight completion deadlines.

Q: Can I use bridging for auction purchases? A: Yes. Auction-focused facilities are designed for fixed completion dates. An agreement in principle before bidding is strongly recommended.

How Kandoo can help you move first

Kandoo is a UK-based retail finance broker with access to a broad panel of bridging lenders. We will assess your project, structure the facility around your exit, and coordinate valuation and legal steps to keep timelines tight. Speak to us early, and we will help you compare rates, terms, and fees so you can secure the right shop at the right time.

Important information

This guide is for general information only and does not constitute advice. Bridging loans are secured on property and carry risks if your exit is delayed. Always assess affordability and seek professional advice where needed.