What is bridging finance?
Bridging finance is short-term borrowing secured against property or land. It is generally used where timing, condition, complexity or the intended repayment route makes a conventional mortgage unsuitable at the outset.
The lender will assess the property, borrower, required loan, loan-to-value, proposed works, experience and exit strategy. The exit is central because it explains how the facility will be repaid within the agreed term.
Shadowfax Funding Solutions compares suitable bridging structures and explains interest, fees, security, conditions, net proceeds and exit requirements before you proceed.
Types of bridging finance
Purchase Bridge
Short-term funding for an eligible residential, commercial or mixed-use property purchase where a defined repayment route is available.
Auction Finance
Funding structured around the completion timetable following a successful auction purchase, subject to valuation and due diligence.
Refurbishment Bridge
Finance for eligible property purchases and works where the project falls within the lender's refurbishment criteria.
Development Exit
Short-term refinance of a completed or near-completed development while units are sold or longer-term finance is arranged.
Common bridging-finance exits
Sale of the Property
The loan is repaid from sale proceeds, supported by a realistic value, marketing strategy and achievable timescale.
Longer-Term Refinance
The property is refinanced onto a commercial mortgage, buy-to-let facility or other suitable term debt once it meets lender requirements.
Another Evidenced Source
Repayment may come from the sale of another asset, a contractual receipt or another clearly evidenced source acceptable to the lender.
How a bridging facility may support a purchase
An investor agrees to purchase a property for £500,000 and requires short-term funding while arranging refurbishment and a longer-term refinance.
A lender would assess the property value, requested loan, works, borrower experience, interest and fees, and evidence that the intended refinance is realistic.
Important: This is an illustration, not a quotation or indication of approval. The gross loan may differ from the net amount available after retained interest, fees and other deductions.
What to weigh up before proceeding
Total Facility Cost
Consider interest, arrangement fees, valuation, legal costs, broker fees, exit fees and the effect of any retained interest on net proceeds.
Loan-to-Value and Security
The lender will assess property value, purchase price, existing charges and the security available for the facility.
Exit Risk
Delays in sale, works or refinance can increase cost and create repayment pressure, so the exit should be credible and appropriately evidenced.
How Shadowfax approaches a bridging-finance review
Requirement
We establish the property, amount, timing, purpose and completion target.
Security
We review purchase price, value, existing debt, works and borrower position.
Exit
We test the proposed sale, refinance or alternative repayment route.
Market Comparison
We compare lenders, leverage, net proceeds, pricing and conditions.
Completion Support
We help coordinate valuation, legal work, due diligence and drawdown.
Compare bridging finance and model the costs
Bridging Finance FAQs
What is bridging finance?
Bridging finance is short-term property-backed funding designed to bridge a defined gap until an agreed exit, such as a property sale, refinance or completion of works.
What can bridging finance be used for?
Subject to lender criteria, it may support property purchases, auction completions, refurbishment, refinancing, chain breaks, development exits and other time-sensitive property transactions.
How much can be borrowed?
The amount available depends on property value, loan-to-value, borrower circumstances, the proposed works, interest and fees, and the strength of the repayment strategy.
What is an exit strategy?
The exit strategy explains how the bridging loan will be repaid. Common examples include sale of the property, refinance onto a longer-term facility or receipt of another clearly evidenced source of funds.
Can interest be retained or rolled up?
Some lenders may allow interest to be retained, rolled up or serviced monthly. The available structure depends on the proposal and lender criteria.
Can bridging finance fund refurbishment?
Potentially. Lenders distinguish between light refurbishment and heavier works. More substantial construction may require refurbishment or development finance instead.
What information will lenders request?
Requirements vary, but may include property details, valuation information, purchase price, works schedule, costings, experience, bank statements, identification and evidence supporting the exit strategy.
How is Shadowfax Funding Solutions paid?
Any broker fees and lender commission arrangements will be explained before you proceed.
Discuss your property and proposed exit
We can help you compare bridging lenders, understand likely net proceeds and assess whether bridging, refurbishment or development finance is the appropriate route.
Funding is subject to status, lender criteria, valuation, due diligence and final approval. Shadowfax Funding Solutions Limited acts as a commercial finance broker, not a lender. Property may be repossessed if repayments are not maintained. Terms, security, interest, fees and net proceeds vary by lender and proposal.