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Bridging finance is a short-term loan designed to “bridge” the gap between buying something and securing longer-term funding. In the UK, businesses often use it when they need quick access to capital but don’t yet have permanent financing in place.
These loans usually last from a few months to two years and can be arranged much faster than traditional bank loans.
The bridging finance market has grown quickly in recent years. In 2025, the total value of UK bridging loans reached over £12 billion, showing how popular this type of lending has become for both property investors and small businesses.
When Businesses and Architects Might Use Bridging Finance
Businesses and architects might turn to bridging finance when time is critical. For example, you may want to buy a property or fund a project before a mortgage or client payment is approved. Bridging loans are often used in property development, refurbishment projects, or to cover temporary cash flow gaps.
Imagine an architecture firm that wins a contract to design and manage the renovation of a commercial building. The client agrees to pay in stages, but the architects need funds immediately to cover staff costs, planning fees and materials for the first stage.
Instead of waiting for a bank loan, the firm could use a bridging loan to access quick funds. Once the project’s first payment comes through, the loan is repaid in full. This allows the project to move forward without delay, helping the firm maintain its schedule and reputation.
The Pros of Bridging Finance
One of the biggest advantages of bridging finance is speed. Traditional loans can take weeks or months to arrange, while bridging loans are often approved in a matter of days. This makes them ideal when you need to act quickly, such as securing a property deal or starting a new project.
Another benefit is flexibility. Bridging lenders tend to assess each case individually, rather than using the strict criteria of high street banks. This can help businesses with strong assets but temporary cash flow issues.
For property professionals, including architects involved in development, bridging finance can make it possible to buy and improve properties before selling or refinancing them. With average UK property prices now above £272,995, quick funding can help firms seize opportunities that would otherwise be missed.
The Cons and Considerations of Bridging Finance
However, bridging finance also comes with risks. Interest rates are much higher than standard business loans, often between 0.6% and 1.5% per month (Source: Maslow Capital). This means a short-term loan can quickly become expensive if repayment is delayed.
There are also arrangement fees and valuation costs to consider, which can increase the total amount owed. If your business cannot repay the loan on time, lenders may recover the debt by selling secured assets such as property.
What Are Alternative Funding Options For Your Business?
There are several alternative lending options which are unsecured, and do not require you to risk any security or collateral.
A business credit line offers flexible access to funds up to an approved limit. You only pay interest on the money you use, making it ideal for managing short-term cash flow issues or unexpected expenses. Many small businesses rely on credit lines to cover temporary gaps between outgoing costs and incoming revenue.
Business personal loans are another option, especially for new or small businesses. These loans are often unsecured and can provide a lump sum to invest in equipment, marketing, or other growth initiatives. Repayment terms are usually fixed, giving you predictability in budgeting.
Invoice factoring helps businesses improve cash flow by selling unpaid invoices to a factoring company. This allows you to access money immediately rather than waiting 30, 60, or 90 days for clients to pay. Factoring can be particularly useful for companies with large or slow-paying clients, as it ensures you have funds to cover day-to-day expenses.
Each option has its benefits and costs. It’s important to assess interest rates, fees, and repayment terms carefully to choose the funding method that best suits your business needs.
Should You Use Bridging?
Bridging finance can be a powerful tool when used correctly. It helps businesses and architects act quickly, complete projects and unlock future profits. However, it should be used with care and only when there is a clear plan to repay the loan within the short term.
If you’re confident about incoming funds or a sale that will clear the loan soon, bridging finance can keep your business moving when timing matters most. But if your income or project timeline is uncertain, it might be safer to explore other, more affordable finance options.
In summary, bridging finance offers flexibility and speed, but it carries higher costs and risk. Used wisely, it can be a bridge to opportunity — but if used carelessly, it can become a costly burden.
Also read:
5 Financial Products to Help Your Business With Cash Flow
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