Business Bridging Loans

A business bridging loan is short-term finance raised for a business purpose and secured against property the business or its directors already own or are buying. It funds a tax bill, a partner buyout, a stock purchase or an acquisition, usually over 1 to 24 months, and is repaid from a defined exit such as a refinance, a sale, or an incoming receipt. Rates start at around 0.75% per month on commercial security and nearer 0.55% per month where the security is residential.

Rates and lender criteria are subject to change. Figures correct at time of publication. Always speak to your broker for up-to-date rates and lending criteria on your specific case.

What is a business bridging loan?

A business bridging loan is a short-term facility taken out because a business needs money faster than its bank can move, secured on property so the lender can underwrite the asset rather than the trading history. The purpose sits in the business. The security sits in the property. That separation is what makes it work when a company is profitable on paper but short of cash in the specific week it matters.

This is where the language in the market gets muddled, and the distinction is worth being precise about. Commercial bridging is usually about the asset: you are buying, refinancing or refurbishing a commercial building and the loan exists because of that property. Business bridging is usually about the need: the property is already there, the loan exists because of something happening inside the business, and the building is simply the security that makes it possible to lend quickly. If your requirement is the acquisition or refinance of a commercial property itself, our commercial bridging loans page and the commercial bridging loan rates guide cover that ground in detail.

The mechanics are the same across both. A first legal charge over property, a term of a few months to a couple of years, interest charged monthly, and repayment in full from an exit that was agreed at the outset. What changes is what the underwriter spends their time on. On an asset-led bridge, the questions concentrate on the property and the plan for it. On a business bridge, the questions concentrate on why the money is needed now and where the repayment comes from. The building is checked, valued and charged, but it is rarely the interesting part of the conversation.

Around a third of the business bridging enquiries we take start with a deadline someone has already tried to move. A tax payment date, a completion date on a share purchase, a supplier who will not hold stock past Friday. In most of those cases the business has spent four or five weeks with its existing bank first, and the bridge is being asked to recover time that has already been lost. That is normal, and it is usually recoverable, but it does shorten the runway.

What can a business bridging loan be used for?

Almost any legitimate business purpose, provided there is property to charge and a repayment route the lender believes in. The table below covers the uses we arrange most often, with the term and the exit that typically go with each.

Tax is the single biggest category. Corporation tax has a hard date, HMRC charges interest and can escalate quickly, and a business that is trading well but has committed its cash to stock, wages or a contract has a genuine timing problem rather than a solvency one. Bridging solves timing problems. It does not solve solvency problems, and no competent lender will pretend otherwise.

Partner and shareholder buyouts are the second cluster, and they behave differently. There is usually a documented agreement, an agreed consideration and a date, which makes the case easy to underwrite, but there is also often an emotional deadline that has been slipping for months and a set of accountants and solicitors working at different speeds. We see at least one of these a quarter where the deal has already stalled once because everybody assumed the bank would fund it inside six weeks. It will not, in most cases, because the bank is underwriting a business whose ownership is about to change and that is precisely the point at which a term lender wants to wait and see.

Capital release for working capital is the third. A business owns its premises outright, has no borrowing against them, and needs cash to take on a larger contract or bridge a seasonal gap. Releasing equity through a bridge takes days where a commercial mortgage takes months, and the bridge is then refinanced onto the mortgage once the contract is running. If you are weighing that up against simply selling and leasing back, our guide on buying or renting business premises works through the trade-offs.

Is a business bridging loan regulated or unregulated?

This is the single most misunderstood point in business bridging, and getting it wrong at the enquiry stage costs weeks. The regulatory position is driven by the security, not by the purpose of the loan.

Where the charge is over commercial property, or over a residential investment property that nobody in the borrower's family lives in, the loan is usually unregulated. That is the position on the large majority of business bridging cases. Unregulated lending is faster, the documentation is lighter, and the timescales quoted in this guide apply.

Where the charge is over a property occupied by the borrower or an immediate family member, most commonly a director's own home, the loan is generally a regulated contract even though the money is going into the business. There are limited exceptions and the analysis can turn on the borrowing entity, the nature of the charge and the specific circumstances, so the position has to be confirmed case by case rather than assumed. What we can say with confidence is that if the director's home is the security, you should plan on the regulated route until told otherwise, and you should not promise anybody a completion inside a fortnight. Our regulated bridging loans page sets out how that process runs.

The practical difference is real. A regulated case carries additional borrower protections, requires advice and disclosure documentation, and involves a longer process with more steps before drawdown. Six weeks is a fair planning assumption. On an unregulated business bridge secured on the trading premises, two weeks is a fair planning assumption. Same lender, same borrower, same amount of money, entirely different timetable, driven purely by which building the charge goes over.

That has a strategic consequence worth thinking about before you apply. If a business has both an unencumbered commercial unit and an unencumbered director's home available as security, charging the commercial unit is usually the faster and cheaper route even though the residential asset might carry a lower headline rate. We would rather place a case at 0.85% per month unregulated and complete in nine days than at 0.60% regulated and miss the deadline the loan exists to meet. Take advice on your own facts. The right answer depends on how hard the date is.

What can you use as security on a business bridging loan?

A first legal charge over property is the standard. What varies is which property, and businesses often have more options than they realise.

The usual candidates are the trading premises itself, a commercial investment property held by the company or its directors, land with an established use, and a director's residential investment property. Second charges behind an existing mortgage are available from a smaller group of lenders and price higher, because the lender sits behind someone else in a recovery. Cross-charging works too: where no single property carries enough equity, two or three assets can be charged together to build the security the loan needs. That structure is common on larger business bridges and it is covered in more detail in our bridging loan criteria guide.

Beyond the property charge, lenders on business cases frequently want a debenture over the trading company and personal guarantees from the directors. Guarantees are close to standard above 65% loan to value. They are not a formality, and they are worth reading properly, because a guarantee given quickly under deadline pressure is still a guarantee eighteen months later.

Title is where the time goes. Get the register early. In our experience the credit decision on a business bridge is rarely the hold-up: it is an unregistered lease to a connected company, an old charge that was satisfied but never removed, a right of way that was never formalised, or a property held in a name that does not quite match the borrowing entity. A quick check of the title register at the start of a case is the cheapest hour anybody spends on it, and it regularly saves a fortnight at the end.

What are business bridging loan rates in 2026?

Business bridging is priced monthly, not annually, and the rate is driven by the security type, the loan to value and how well evidenced the exit is. The bands below are indicative of the market in 2026.

Rates and lender criteria are subject to change. Figures correct at time of publication. Always speak to your broker for up-to-date rates and lending criteria on your specific case.

Sixty per cent is the number to remember. It is the boundary at which pricing changes most sharply, and on a business bridge you often have some control over it, because the loan amount is set by what the business needs rather than by a purchase price. Trimming a £430,000 requirement to £395,000 to drop under a lender's 60% threshold can save more in rate over twelve months than the £35,000 was worth in the first place. That is a conversation worth having before the application goes in, not after the terms come back.

On top of the monthly rate sit the fees. Arrangement fees run 1% to 2% of the loan on most business cases and are usually deducted from the advance rather than paid up front. Valuation, lender legal costs and your own legal costs are additional, and some lenders charge an exit fee, typically expressed as a percentage of the loan or of the redemption figure. Our bridging loan costs and fees guide breaks each of those down, and the bridging loan rates guide is reviewed monthly against the wider market.

How much can a business borrow and at what LTV?

The loan is sized on the property, not on the profit. That is the whole reason a business bridge can be arranged in days when a term facility cannot: the lender is not waiting on filed accounts, an affordability calculation or a covenant test, it is lending against an asset it can value and recover. FD Commercial arranges business bridging from £250,000 with no fixed ceiling.

Loan to value is the constraint that binds. Up to 60% is comfortable territory with the widest lender interest and the sharpest pricing. Between 60% and 65% the rate rises and the underwriting gets more detailed, with more questions about the exit and often a requirement for guarantees. Above 65%, and certainly at 70%, the lender is stretching, and it will only do so where the exit is documented rather than described. Above 70% is possible on strong cases but rarely at a price that makes commercial sense for a short-term business purpose.

Two points frequently move the number in the borrower's favour. The first is additional security: charging a second property, even a modest one, drops the overall gearing and can move the whole case into a better pricing band. The second is the valuation basis. Commercial property is often valued on both a market value and a restricted realisation basis, and lenders will lend against the lower figure. If the two are far apart, which is common on specialised or owner-occupied premises, the loan available can come in well below what the borrower expected from an agent's opinion. Ask which basis the lender is using at term sheet stage, not when the report lands.

You can model the numbers for your own case with our bridging loan calculator, which shows gross loan, interest by structure, fees and net advance side by side.

How fast can a business bridging loan complete?

Five to fourteen days is realistic on an unregulated business bridge where the title is clean, the security is straightforward and the exit is evidenced. Terms in principle typically come back within 24 to 48 hours. Speed is the point of the product, and a lender that cannot move at that pace is not really competing.

What determines where you land inside that range is almost never the lender's credit team. It is the paperwork behind the borrower. A limited company with filed accounts, an unencumbered freehold, a solicitor who has done bridging before and a valuer who can attend within three days will complete at the fast end. A company with a late filing, a leasehold interest that was never registered, a first charge holder whose consent is required, and a solicitor treating the file like a residential purchase will take a month regardless of what the lender promised.

Get the valuation and the legals running at the same time. Sequential is slower and there is no good reason for it. On a well-managed business bridge the valuer is instructed on the day terms are accepted, the solicitor starts title checks and searches in parallel, and undertakings are agreed while the report is being written.

A recent case makes the point. A two-director engineering firm in the Midlands came to us with a £310,000 corporation tax liability due in eleven days, an unencumbered freehold industrial unit, and a bank that had just asked for another set of management accounts. Terms were issued the following morning, the valuer attended on day four, and the funds were with their accountant on day nine. Nothing clever happened. The title was clean, the accounts were filed, and the directors answered questions the same day they were asked.

What exit strategies do lenders accept for business bridging?

The exit is everything. Nine times out of ten the first substantive question a lender asks on a business bridge is not what the money is for, it is where the repayment comes from and what evidence there is for it. A business bridge with a vague exit is not a bridge. It is a deferred problem with interest attached.

Most lenders want two exits where the primary route carries any timing risk. A refinance with a sale as the fallback is the standard pairing on business cases, and it is also the honest way to structure a loan, because it forces the borrower to think about what happens if the first plan slips. Terms should be set with headroom. Taking a nine-month facility for a refinance you expect in five costs a little more in interest and removes a great deal of pressure, and it is far cheaper than an extension fee and a default rate at month five.

If the exit is a commercial mortgage, start the mortgage application while the bridge is being arranged rather than after it completes. The comparison between the two products, and how the handover works, is set out in our commercial mortgage versus bridging loan guide.

What does a business bridging loan cost?

The headline rate is only part of it. What matters is the total cost from the day the money arrives to the day the loan is redeemed, and how much of the gross loan actually reaches the business. The worked example below runs a typical case in full.

Now change one variable. On the same loan with interest serviced monthly instead of rolled up, the company pays £4,250 a month, £38,250 over the nine months, and redeems at exactly £500,000. Total cost falls to £54,750, a saving of £1,327, and the business keeps the full £483,500 advance working. Servicing needs the cash flow to support the payments, which is the catch on a business bridge taken out precisely because cash is tight.

Retained interest sits between the two. The lender holds back nine months of interest at £38,250 on day one, so the net advance drops to £445,250, the redemption figure stays at £500,000, and the total cost is the same £54,750 as servicing. It costs no more than servicing in interest terms, but it takes £38,250 of usable cash out of the deal at the start, which on a business bridge is usually the wrong trade. The reason people still choose it is that it removes any risk of missing a payment.

The general shape holds across cases. Rolled up costs the most because it compounds and it consumes nothing month to month. Retained and serviced cost the same in interest, and the choice between them is a cash flow decision rather than a price one. If the business can service, service.

How does business bridging compare with other business finance?

Bridging is not the cheapest way to fund a business. Nobody pretends it is. It is frequently the only way to fund one inside the timescale available, which is a different question entirely, and the comparison that matters is against the cost of missing the deadline rather than against an annual percentage rate. The table below sets it against the alternatives businesses usually weigh up.

Two of these are complements rather than competitors. A commercial mortgage is usually the exit from a business bridge, not the alternative to it, and the sensible structure on a capital release or a buyout is to run both processes at once. Asset finance works the same way where the bridge has funded plant at short notice: the plant is refinanced onto an asset facility and the bridge is redeemed. If you are working through which longer-term product should sit behind the bridge, our guide to commercial mortgages for small businesses covers the criteria.

Invoice finance is the one businesses most often should have arranged earlier. Where the underlying problem is a recurring gap between doing the work and being paid for it, a bridge fixes this quarter and leaves the same gap next quarter. Bridging is the right answer to a single event with a date on it. It is the wrong answer to a structural cash flow pattern, and any broker who tells you otherwise is selling rather than advising.

What do lenders assess on a business bridging application?

Five things, roughly in this order.

The exit. First, last and hardest. What repays the loan, when, and what evidence supports it. A written term sheet from the refinancing lender, a marketing appraisal from a selling agent, or a signed contract from the paying party moves a case forward faster than anything else in the file.

The security. Property type, value, tenure, condition and marketability. Standard commercial and residential assets are easy. Specialised premises, part-built property, land without consent, and anything with an unusual title take longer and price higher. The valuer's view, not the owner's, is what sets the loan.

The purpose. Lenders want to know the money is going where you say it is, and they will often pay a supplier, a solicitor or HMRC directly rather than releasing funds to the company account. Being specific helps you. A tax computation, a share purchase agreement or a supplier invoice attached to the application is worth more than a paragraph of explanation.

The borrower and the structure. Who is borrowing, the company's filing history, the directors' credit profile, and any existing borrowing or charges. Adverse credit does not stop a business bridge in the way it stops a bank facility, because the lender is secured, but it narrows the options and moves the rate. Late filings at Companies House cause more trouble than most directors expect.

The trading position. Lighter than on a term facility, but not absent. The lender wants comfort that the business is solvent, that the requirement is a timing problem, and that nothing is about to arrive that would change the picture. Management accounts and current bank statements usually cover it.

Have your accountant produce the corporation tax computation and up-to-date management figures before you approach a lender, not after. It sounds obvious. It is the single most common reason a nine-day completion becomes a three-week one, because the accountant is on holiday, the figures need adjusting, and by the time they arrive the valuer has moved on to another instruction.

Business bridging loans: frequently asked questions

Business bridging sits inside a wider short-term market, and the right product is not always the one you started with. Our bridging loans hub covers the full range, including auction, refurbishment and development exit facilities.