Bridging Loans for UK Businesses: How They Work in 2026
An auction purchase with a 28 day completion deadline. A unit next door that comes up for sale once in a decade. A chain break threatening a commercial move. These are bridging loan situations: too fast for a mortgage, too big for a working capital facility.
A bridging loan is short term finance secured against property. It exists to get you from A to B quickly, on the strict understanding that you have a clear plan to pay it back. That plan, the exit, is the single thing lenders care about most, so we'll spend proper time on it below.
What Is a Bridging Loan?
It's a loan secured against property, designed to run for months rather than years, and repaid in one go rather than in monthly instalments of capital. Interest is usually rolled up or retained, so nothing leaves your cash flow until the loan is repaid.
As a general guide across the UK market in 2026:
- Loan to value: up to around 75% on standard property, with commercial property typically capped lower at 65 to 70%
- Terms: 1 to 24 months, with 6 to 12 months the most common on commercial deals
- Speed: clean cases complete in around 2 to 6 weeks, and sometimes faster where the legals are simple
These figures are a general guide, not a quote. Every case is subject to status, valuation and the lender's own checks.
How Bridging Is Priced
Bridging is priced monthly, not annually. Commercial bridging in 2026 typically runs from around 0.75% to 1.5% per month, with many deals landing between 0.85% and 1.10%. That sounds small until you annualise it, which is exactly why bridging is a short term tool and not a way to hold property long term.
On top of the rate, budget for an arrangement fee (commonly around 2% of the loan), a valuation, and legal costs for both sides. The honest way to compare two bridging offers is the same as any funding: total cost in pounds from drawdown to redemption, including every fee.
Three ways the interest can be handled:
- Rolled up: interest compounds and is repaid with the loan at the end. Nothing to pay monthly
- Retained: the lender holds back the expected interest from the advance on day one
- Serviced: you pay the interest monthly, keeping the debt from growing
One knock-on effect worth knowing: rolled up and retained interest eat into how much you actually receive on day one. A 75% gross loan can land nearer 65 to 70% net once interest and fees come out.
The Exit Strategy Decides Everything
A bridging lender's first question isn't “what's the property worth?” It's “how does this loan get repaid?” The two exits they see most:
- Refinance: the bridge is repaid by a longer term product, like a commercial mortgage, once the property or the business is ready for one
- Sale: the loan is repaid from selling the property, or another asset, within the term
The stronger and more evidenced the exit, the better the terms. A decision in principle for the refinance, or a realistic marketing appraisal for the sale, does more for your application than anything else you can provide.
Working to a deadline?
Tell us the situation and the timescale and we'll put your case to the bridging lenders on our panel suited to it. Free to use, and a real account manager talks you through the costs before anything moves.
Check your optionsWhere Businesses Use Bridging
- Auction purchases, where completion is contractually due in 28 days
- Buying premises before a commercial mortgage can complete
- Refurbishing a property that isn't yet mortgageable, then refinancing
- Releasing cash from owned property for a time-limited business opportunity
The Risks, Stated Plainly
Bridging is secured against property, so if the loan isn't repaid the lender can enforce against that property. If your exit slips, extensions and default rates get expensive quickly. The discipline is to stress test the plan before you borrow: if the refinance took three months longer than expected, or the sale price came in 10% lower, would the numbers still work? If the answer is no, the loan is too tight.
Common Questions
How fast can a bridging loan complete?
Clean cases typically complete in 2 to 6 weeks. The variables are the valuation and the legal work, so having your solicitor lined up on day one genuinely shortens the timeline.
Do I make monthly payments?
Not necessarily. With rolled up or retained interest there are no monthly payments at all: everything settles when the loan is repaid. Serviced interest is the exception, where you pay monthly to stop the balance growing.
Can I get bridging with imperfect credit?
Bridging lenders weight the security and the exit far more heavily than a credit score, so adverse credit is not the automatic dealbreaker it can be elsewhere. Expect it to show up in the rate.
Is business bridging regulated?
Bridging secured on commercial property, or on property that is not your home, is generally unregulated business lending. Loans secured against a borrower's own residence work differently and carry FCA regulation. CapExpand only arranges non-regulated introductions for Ltd companies and LLPs.
Speak to someone who does this weekly
CapExpand introduces you to established bridging lenders from our panel, with every cost and the full exit maths laid out in plain English before you commit. Call us on 0333 041 3127 or start with the two-minute form.
Check your optionsCapExpand is a credit introducer, not a lender. We do not provide financial advice, and nothing here is a recommendation. All figures are a general guide, not a quote. All funding is subject to status, valuation and lender approval. Bridging loans are secured against property, which is at risk if the loan is not repaid.
CapExpand Ltd (Company No. 14433858) is a commercial finance introducer, not a lender. We are not currently authorised or regulated by the Financial Conduct Authority and do not provide financial advice. All information on this page is for educational purposes only. Funding is subject to status and lender criteria. CapExpand will receive a commission from providers at no extra cost to you.