Bridging finance for SPVs

Why SPVs are powering faster UK property deals

Bridging finance for special purpose vehicles has become a mainstay of the UK property market, allowing investors to move quickly while keeping risks ring-fenced. An SPV is a limited company created solely to hold and manage a specific asset or project. In property, that usually means a company registered with Companies House to buy, refurbish, or refinance a single asset or portfolio. By isolating liabilities from the wider business, SPVs protect balance sheets and make it clearer for lenders to assess a single transaction on its merits.

Speed is the standout advantage. With documents in order, many SPV bridging loans can complete within 7 to 10 days, and 2 to 4 weeks is common when valuations or legal work need more diligence. That timeline suits auctions, rapid completions, and refurbishment schedules where every day counts. Lenders typically focus on the security value and your exit strategy, with deposits in the 20 to 35 percent range. For well-prepared SPVs, that clarity translates into swift approvals.

Cost dynamics are improving too. New ranges in the market include monthly rates from around 0.79 percent, reflecting intense lender competition for high-quality SPV business. For investors, a lower monthly rate over a short term can materially improve the profitability of a flip or a hold-refurbish-refinance plan. At the same time, many products offer flexibility such as interest retained or rolled up, and no early repayment fees, which helps manage cash flow during works.

Tax efficiency is another driver. Since buy-to-let tax changes, landlords have increasingly used SPVs to manage portfolios and optimise liabilities. In certain transactions, purchasing the shares of an SPV that holds a property can reduce taxes compared with buying the property directly. While specialist advice is essential, the direction of travel is clear: SPVs have become the preferred structure for many investors, from first-time landlords to experienced portfolio builders.

Understanding APR is not just about percentages. It is about knowing what you will pay in real terms across the life of the bridge and the impact on your exit.

Recent deal flow underscores the momentum. Lenders report rising demand from SPVs for buy-to-let, HMOs and semi-commercial stock. Prime London remains active, with multi-million completions by specialist funders illustrating both investor appetite and lender innovation. For those targeting competitive markets, a well-prepared SPV can be the difference between losing out and locking in value.

Use this structure to move decisively without compromising prudence. Prepare the company properly, document the exit, and quantify the true cost. Do that, and SPV bridging becomes a disciplined tool for growth, not just a quick fix.

Who benefits from SPV bridging

SPV bridging suits UK investors who value speed, clarity, and risk isolation. If you are buying at auction, renovating before refinancing, or acquiring semi-commercial and HMO assets, an SPV can streamline both tax and lender approvals. Portfolio landlords increasingly consolidate purchases through SPVs to maintain clean records and flexible funding lines. First-time investors can also qualify if their SPV is correctly set up with the right SIC codes and a plausible exit plan. For London and other high-demand regions, where timing is critical, the ability to complete in days is often decisive.

Your funding routes at a glance

1. Standard SPV bridge for buy-to-let acquisitions and refurbishments.

2. Auction finance via SPV with 28-day completion targets.

3. Light to heavy refurbishment bridges with interest rolled up.

4. Semi-commercial and mixed-use SPV bridging for yield upgrades.

5. Bridge-to-let products with pre-agreed refinance pathways.

6. High-value prime London SPV bridging for rapid completions.

7. SPV versus trading company comparison where flexibility is key.

Costs, timing, upside, and risk factors

Who qualifies and what lenders look for

Eligibility focuses on the asset and your exit rather than long trading histories. A UK-registered SPV with appropriate SIC codes for property investment or development is essential, along with a UK business bank account. Directors and shareholders need standard ID and AML checks. Lenders will scrutinise the property value, condition, and location, particularly for HMOs, mixed-use, and semi-commercial assets. A deposit of 20 to 35 percent is common, with proof of funds required. Experience helps, but it is not mandatory. First-time SPV directors can be approved if they demonstrate a clear plan, realistic build and letting timelines, and credible contractors where works are involved. Your exit strategy must be evidenced, whether through an agreement in principle for buy-to-let refinance or agent-backed sales comparables. Kandoo can help position your application, matching your SPV profile to lenders comfortable with your asset class and timescales, which often makes the difference between a slow decline and a swift approval.

From enquiry to drawdown in simple steps

1. Set up your SPV and business bank account.

2. Define deposit size and preferred exit strategy.

3. Share the deal pack and refurbishment scope.

4. Obtain terms and submit full application.

5. Valuation, legals, and underwriting progress.

6. Final conditions satisfied and documents signed.

7. Funds released to complete the purchase.

8. Execute works, then refinance or sell.

Advantages and trade-offs at a glance

Before you commit

A bridge should be a tool, not a crutch. Model your costs under conservative scenarios, including a longer hold and a higher refinance rate. Ensure your builder quotes, schedules, and permissions are realistic. In tight markets, a modest contingency on cost and time can preserve returns. Confirm that your SPV is properly configured at Companies House and that banking, ID checks, and insurance are in place early to avoid procedural delays. If you are targeting London or other competitive regions, prepare your documentation upfront so valuation and legal work can start immediately upon offer. Above all, lock in the exit: a refinance decision in principle or agent-backed sales evidence is worth more than assumptions.

Alternatives if an SPV bridge is not right today

1. Buy-to-let or commercial mortgage for slower but cheaper funding.

2. Development finance for heavier works and ground-up builds.

3. Secured business loan against company assets for cash flow gaps.

4. Mezzanine finance to top up equity behind senior debt.

5. VAT and tax bridging for short-term HMRC liabilities.

6. Equity partners or joint ventures to reduce leverage.

Frequently asked questions

Q: How fast can an SPV bridge complete in the UK? A: With documents ready, many complete within 7 to 10 days. Where complex legals or valuations are needed, allow 2 to 4 weeks.

Q: What deposit will I need for an SPV bridge? A: Expect 20 to 35 percent depending on property type, location, and your experience. Lower LTVs usually secure sharper pricing.

Q: Are first-time SPV directors eligible? A: Yes, if the SPV is correctly registered, the SIC codes fit property activity, and you present a credible exit. Experience helps but is not essential.

Q: What rates are available currently? A: Competitive lenders are pricing from around 0.79 percent per month for strong cases. Your rate depends on LTV, asset quality, and term.

Q: What properties are suitable? A: Residential, HMOs, mixed-use, and semi-commercial are common. Prime London and higher-value assets are actively funded by specialist lenders.

Q: Do many products charge early repayment fees? A: Many bridges have no early repayment fees, which helps if your works finish ahead of schedule. Always confirm terms before you commit.

How Kandoo helps you move first

Kandoo is a UK-based retail finance broker that connects SPVs with lenders who can move at pace without compromising diligence. We help you structure your SPV, assemble a convincing deal pack, and select lenders aligned to your asset, timeline, and exit. When speed and certainty matter, our role is to secure competitive terms and keep the process moving until funds land.

Important information

This article provides general information only and does not constitute financial, legal, or tax advice. Always seek professional guidance tailored to your circumstances. Rates and criteria are subject to change and product availability may vary by lender.