Specialist bridging finance for hospitality property

What a bridging lender assesses and the exit that matters

A bridging lender is security-led and exit-led, which is what lets it move quickly. It wants a clear first or second charge over a financeable property, a valuation that supports the loan to value, and above all a credible, near-term exit: a term refinance the lender can see is achievable, or a sale with realistic pricing. It looks less at years of affordability than a term lender does, because the loan is short and is repaid by the exit rather than out of trade over time, so a tired or part-let hospitality asset that a term lender would decline on condition can still be bridged. It will assess the borrower's experience and the plan for the property, particularly on a refurbishment where the works carry risk, and it will want to understand the trade the asset will reach if the exit is a term mortgage sized on that trade. The core rule is that a defined repayment route must be in place before the loan draws. We confirm and document the exit at the outset, and we arrange the term refinance alongside the bridge wherever that is the exit, so the short-dated debt has a clear destination rather than an open end.

How much you can borrow and the deposit required

How much is a 200k bridging loan, and how much can you borrow overall? A bridging loan is sized on the value and the charge, indicatively up to 70 to 75 percent of value on a first charge, or against the available equity on a second charge behind an existing mortgage. On a 200,000 pound bridge at an indicative rate of around 0.85 to 1 percent a month, the interest runs at roughly 1,700 to 2,000 pounds a month, so a six-month bridge costs in the region of 10,000 to 12,000 pounds in interest plus an arrangement fee and legal and valuation costs; the exact rate varies by lender, security and exit. The deposit, or the equity that must remain, is the balance above the loan to value, so on a purchase bridge at 70 percent the borrower funds 30 percent plus fees. Where interest is retained or rolled up rather than serviced, the net day-one advance is the gross loan less the retained interest and fees, which reduces the cash released, so we always model the net figure. All bands are illustrative, vary by lender and asset, are subject to credit approval, and are not an offer.

What a bridging loan costs and the downsides to weigh

Bridging is dearer than a term mortgage because it is fast, flexible and short, and priced per month. Expect a lender arrangement fee, indicatively around 1 to 2 percent, monthly interest, a valuation, legal costs for both sides and sometimes an exit fee. The single largest cost lever is time: a bridge held for three months costs a fraction of one held for twelve, so a realistic, well-planned exit matters more than chasing the lowest headline monthly rate. The real downsides of a bridging loan are the cost if it runs long and, above all, exit risk: if the planned term refinance or sale does not materialise, short-dated debt becomes an expensive problem, which is why we will not arrange a bridge without a credible exit. Rolled-up interest also erodes the equity in the asset over the term, so a longer bridge leaves less headroom for the refinance. We disclose our broker fee in writing, quote the all-in cost to the exit rather than the monthly rate alone, and never claim an exclusive tie to any lender. The figures are indicative and not an offer of finance.

Bridging against a term mortgage and development finance

Bridging is the right tool when you need to move faster than a term mortgage can, or when the asset is not yet in a state a term lender will fund, and you have a clear exit. A term commercial mortgage is cheaper and longer, but it takes longer to arrange and needs an asset that already meets the lender's condition and trade tests, so it is the destination rather than the fast money. Is a bridging loan a good idea? It is, when the exit is confirmed and the time saved or the trade uplift is worth the monthly cost; it is a poor idea when the exit is vague, because that is where the cost runs away. Development finance is the right structure for ground-up construction or a scheme so substantial it is effectively a rebuild, drawn in stages against a monitoring surveyor, whereas a bridge suits a purchase or a lighter refurbishment on an existing building. We test which case you are actually in, because paying for a bridge you did not need, or taking one you cannot exit, both cost more than the right structure. The UK bridging and development loan book stood at a record 13.7 billion pounds at the end of September 2025 (BDLA), evidence of how much short-term and transitional finance the market now runs on.