Three property purchases last month. All needed funds within 28 days. One was an auction, one was an opportunity that wouldn’t stay on the market, and one was a business owner who’d sold their company and just needed six months before they had cash to buy outright.
None of them were emergencies. All of them needed bridging finance.
That’s the bit people misunderstand. Bridging still carries this reputation as expensive emergency funding – something you use when everything else has failed. Sometimes that’s true. But more often, it’s just the appropriate tool when timing doesn’t match traditional mortgage processes.
Traditional commercial mortgages take time. Valuations, legal work, lender decisions, completion. You’re looking at 8 to 12 weeks if everything runs smoothly, longer if it doesn’t. Which is fine when you’re planning six months ahead and the seller’s patient. It’s not fine when you’re bidding at auction with a 28-day completion requirement.
When Auctions Make Sense
Auction finance is the obvious one. You’ve got 28 days from hammer fall to completion, sometimes less. Most commercial mortgage lenders won’t even look at that timeframe. Bridging lenders will, because that’s what they’re set up to do. Fast decisions, streamlined process, funding in place before you bid so you know you can complete.
We’ve arranged auction finance for commercial premises, development sites, investment properties. The key is having the structure agreed before you’re in the room. You need to know your limit, know the lender’s on board, and know you can move when the hammer comes down. Otherwise you’re bidding on hope, which is expensive if you can’t complete.
The cost is higher than a mortgage – bridging rates typically run from 0.5% to 1.5% per month depending on the loan-to-value and your exit strategy. But you’re paying for speed and certainty. On a £300,000 property over three months, you might pay £4,500 to £13,500 in interest. That sounds significant until you compare it to losing a £50,000 deposit because you couldn’t complete, or missing a property that would have added £100,000 to your portfolio.
When Opportunities Won’t Wait
The second scenario happens more than people think. The right property comes up – location works, price works, tenant already in place or development potential is clear – but it won’t last. These aren’t distressed sales or desperate sellers. They’re just good properties in strong markets where other buyers are ready to move.
A client bought a commercial unit last month. Tenant on a 10-year lease, yield was strong, location fit their portfolio. The seller had three other interested parties and wanted completion within four weeks. Traditional mortgage would have taken three months minimum. By the time our client got to the front of that queue, the property would have been gone.
Bridging finance let them move immediately. Offer accepted, funds in place within three weeks, completion done. They’ll likely refinance onto a commercial mortgage in the next few months once the bridging term is up, but that’s fine. The point was securing the asset when it was available, not when the mortgage process caught up.
When You Don’t Need Long-Term Funding
The third example is less obvious but just as valid. A business owner had sold their company – sale agreed, legals progressing, funds due in six months. They found a commercial property they wanted to buy for the next venture. Cash buyer, no mortgage needed once the sale completed.
The problem was timing. The property was available now, the sale funds weren’t. They could have waited six months and risked losing the property, or they could use bridging finance to buy now and repay when the business sale completed. No need for a long-term mortgage. No need to go through affordability assessments or build a two-year trading history for the new business. Just a short-term facility to bridge the gap until their own funds arrived.
That’s not emergency funding. That’s strategic use of the right tool at the right time.
When It Doesn’t Work
Bridging finance doesn’t work if you haven’t got a clear exit. Lenders want to know how you’re repaying – whether that’s refinancing onto a mortgage, selling the property, or using funds you know are arriving. “We’ll figure it out later” isn’t an exit strategy, and good bridging lenders won’t touch it.
It also doesn’t work if the cost is going to damage the deal. If you’re buying at full market value with tight margins, paying 12 months of bridging interest might wipe out any profit. We’ll tell you that before you commit. Sometimes the answer is to wait, find different funding, or walk away. That’s a better conversation than realising six months in that the numbers don’t work.
What You Actually Need
If you’re looking at bridging finance, you need three things before you start: a clear property or opportunity, a realistic timeline for repayment, and enough equity or deposit to make the loan-to-value work. Most bridging lenders will go to 70% or 75% LTV, some higher depending on the asset and your situation.
From there, it’s about finding the right lender for your specific scenario. Some specialise in auction finance, some prefer investment properties, some are better for refurbishment or development. We’ll match you to the one that fits rather than trying to force your situation into the wrong product.
Speed matters, but so does structure. Get both right and bridging finance stops being emergency funding and starts being exactly what it should be – a tool for moving quickly when the opportunity justifies it.
Frequently Asked Questions
Q: How quickly can bridging finance be arranged?
A: Typically two to four weeks from application to funds, sometimes faster for straightforward cases. If you’re buying at auction, we’ll aim to have the facility agreed before you bid so you know you can complete within the 28-day deadline. Speed is the whole point of bridging – lenders are set up for fast decisions.
Q: What does bridging finance cost compared to a commercial mortgage?
A: Bridging rates typically run from 0.5% to 1.5% per month, significantly higher than mortgage rates. On a £300,000 property over three months, you might pay £4,500 to £13,500 in interest. You’re paying for speed and certainty rather than long-term affordability. Most people refinance onto a cheaper mortgage once the immediate timeline pressure is gone.
Q: Do I need an exit strategy before applying for bridging finance?
A: Yes – lenders want to know how you’re repaying. Common exit strategies include refinancing onto a commercial mortgage, selling the property, or using funds you know are arriving (like a business sale or inheritance). “We’ll work it out later” won’t get approved. The exit strategy needs to be realistic and evidenced before any responsible lender will proceed.
Q: What loan-to-value can I get with bridging finance?
A: Most bridging lenders will go to 70% or 75% LTV, some higher depending on the property type and your situation. That means you’ll typically need a 25-30% deposit or equity. The exact LTV depends on the asset quality, your exit strategy, and the lender’s appetite for your specific scenario.
Q: Is bridging finance only for emergencies or distressed situations?
A: No – that’s an outdated perception. Bridging is increasingly used for strategic purposes: auction purchases with 28-day deadlines, opportunity deals that won’t wait for mortgage timelines, or situations where short-term funding makes more sense than a long-term mortgage. It’s about having the right tool when timing matters, not desperation funding.
Q: Can I refinance from bridging to a commercial mortgage later?
A: Yes, and many clients do exactly that. Bridging gets you into the property quickly, then once you’ve completed and the time pressure is gone, you can refinance onto a cheaper commercial mortgage for the long term. This is a common and perfectly legitimate strategy for securing opportunities that won’t wait for traditional mortgage timelines.