Speed kills deals. Not having it, that is.
In commercial property, the gap between spotting an opportunity and completing on it can be the difference between growth and watching a competitor walk away with your site. Traditional lending timelines do not always match the pace at which business moves, and for SMEs in particular, that mismatch has been a persistent problem.
The UK bridging loan market hit £9.01 billion in 2024, up from £4.8 billion just two years earlier. That growth is not driven by homeowners alone. A significant portion comes from business owners, property investors, and developers who need capital deployed in days rather than months.
The Speed Problem in Commercial Finance
Standard commercial mortgages can take 8 to 12 weeks to arrange. For straightforward applications with clean financials and simple security, the process still involves credit committees, multiple valuations, and layers of due diligence.
That timeline works when you are refinancing an existing property or planning a purchase months in advance. It falls apart when the opportunity is time-sensitive.
Auction purchases require completion within 28 days. Distressed sales and receivership disposals move on compressed timescales. Even negotiated off-market deals can collapse if the buyer cannot demonstrate funding certainty quickly enough.
This is where bridging finance has moved from niche product to mainstream business tool.
How Bridging Works for Businesses
A bridging loan is short-term secured finance, typically running from 1 to 18 months. It provides a lump sum against property security, with interest usually rolled up into the loan rather than paid monthly. The borrower repays the full balance plus interest at the end of the term, either by selling the asset or refinancing onto longer-term debt.
For businesses, the applications go well beyond simply buying property before selling another.
Commercial acquisitions. A business finds the right premises at auction or through a broker. A bridging loan funds the purchase in days while a commercial mortgage is arranged for the longer term.
Development and refurbishment. Properties that are not mortgageable in their current condition, such as empty commercial units or buildings requiring change of use, can be purchased with bridging finance. Once works are complete and the asset is lettable or saleable, the borrower exits onto permanent funding.
Cash flow and restructuring. Some businesses use property-backed bridging loans to inject working capital during a restructuring or to meet a short-term obligation while waiting for a larger funding round or asset disposal to complete.
Portfolio building. Property investors expanding their commercial or mixed-use portfolios use bridging to act quickly on below-market-value opportunities, refinancing each asset once stabilised.
The FinTech Factor
Part of the market’s growth is down to technology. Specialist lenders have streamlined underwriting, with some offering decisions in principle within hours and written terms the same day. Automated valuation models, open banking data, and digital document processing have all compressed timescales.
ABC Finance, experts in bridging loans, report that written terms can be issued within two hours of an enquiry, with loans ranging from £10,000 to £250 million. The FCA-authorised broker works across a panel of specialist lenders including Together Money, United Trust Bank, and Shawbrook Bank, matching borrowers with products based on security type, loan-to-value ratio, and exit strategy.
That broker model matters. The bridging market has dozens of active lenders, each with different appetite for risk, sector preferences, and pricing structures. A commercial unit above a takeaway in Manchester will be assessed very differently from a Grade II listed office building in Leeds. Access to the right lender for the right deal can save thousands in arrangement fees and monthly interest charges.
What the Numbers Look Like
Bridging rates typically sit between 0.4% and 1.5% per month, charged on the outstanding balance. The exact rate depends on the loan-to-value ratio, the type of property, and the strength of the exit strategy.
On a £500,000 bridging loan at 0.7% per month over six months, the total interest cost would be around £21,000. Add arrangement fees (usually 1-2% of the loan) and legal costs, and the total cost of finance sits in the region of £30,000 to £35,000.
That sounds steep compared to a standard mortgage. But if the alternative is losing a commercial property worth significantly more, or waiting three months for traditional finance while paying rent on temporary premises, the maths often works out.
The critical factor is the exit. Lenders want to see a clear, credible plan for repayment. A signed sale agreement, a mortgage offer in principle, or evidence of an incoming funding round all strengthen an application. Vague exit plans attract higher rates or outright decline.
Risks Worth Understanding
Bridging finance is secured against property. If the borrower cannot repay, the lender can enforce the charge and take possession of the asset. For businesses using trading premises as security, that risk is not abstract.
Interest rolls up daily. A loan that was meant to last three months but stretches to nine because of planning delays or a stalled sale can become significantly more expensive than originally projected.
Legal fees apply on both sides. The borrower pays their own solicitor and the lender’s, which can add £3,000 to £5,000 to the overall cost.
None of this means bridging is a bad option. It means it is a tool that works best when the borrower has a defined plan, a realistic timeline, and professional advice.
Where the Market Is Heading
The Association of Short Term Lenders (ASTL) has tracked consistent growth in bridging completions over the past five years. Rising interest rates on traditional commercial mortgages have made short-term borrowing comparatively more attractive for specific use cases, and lender competition continues to push rates lower at the sub-60% LTV end of the market.
For a deeper look at how bridging fits within the wider commercial lending picture, the British Business Bank’s small business finance guide offers a useful breakdown of available options. The ASTL’s quarterly market data tracks lending volumes and trends across the short-term finance sector.
For UK businesses competing for commercial property in a market where speed and certainty of funding increasingly determine who wins the deal, bridging finance has become less of a last resort and more of a first move.