Quick answer
What is the key question in bridging finance?
How will the facility be repaid, and what happens if that exit is delayed? Commercial bridging finance is short-term property funding intended to cover a defined gap. Compare the net cash released, the full settlement amount, security and completion requirements alongside evidence for the planned sale or refinance.
Key points
- The exit needs dates, evidence and a delay scenario.
- Gross facility size and usable cash can differ.
- Valuation, legal work and lender conditions shape the completion timetable.
- A future refinance is a separate assessment, not a guaranteed event.
What gap is the bridge intended to cover?
Describe the property event, the date funds are needed and the event expected to repay the advance. Examples to discuss could include a commercial purchase before another sale completes, or a property transition before a longer-term facility is available. The funding category should follow the actual gap; a general requirement for permanent capital needs a different conversation.
Write the sequence on one page: purchase or existing balance, work to be completed, key permissions, marketing or refinance, and final repayment. If the sequence has a missing step, identify it early. An assumed future increase in value is not itself a cash receipt or a completed refinance.
What does the lender assess?
Bridging providers assess the property and transaction, the borrower and the intended exit. Shawbrook’s property finance information describes bridging as short-term funding and distinguishes it from longer-term mortgage arrangements [1]. Exact security, permitted use and borrower requirements depend on the specific lender and case.
Prepare the address, ownership structure, purchase details, existing charges, condition and proposed work. Explain who will own the property and whether the company is trading from it, investing in it or carrying out a project. That description helps a specialist establish which market and assessment process apply; Felix’s enquiry does not make that determination.
How much money will actually be available?
Ask the broker to separate the gross facility from the net advance. Fees, retained interest and the repayment of an existing charge can reduce the amount released for the transaction. A facility described as £200,000 may not mean £200,000 is available to pay the seller or the builder.
Also establish when your own contribution is needed. Legal, survey, valuation and other professional costs can fall before completion. Make a completion statement using the actual figures, then reconcile it with the purchase funding requirement so that an unnoticed deduction does not create a last-minute shortfall.
| Figure | What it should tell you |
|---|---|
| Gross facility | The total facility described in the proposal. |
| Deductions | Fees, interest retained and existing debts repaid. |
| Net advance | Cash available after those deductions. |
| Own contribution | Cash and timing required from the borrower. |
| Settlement amount | What must be paid to end the facility on a given date. |
An illustrative interest and fee calculation
Suppose a hypothetical £200,000 balance carries simple interest of 1% per month for six months, with a £4,000 arrangement fee and £3,000 of separate legal and valuation costs. On those assumptions alone, interest is £12,000 and the listed costs total £19,000. If interest and the arrangement fee are deducted at the start, the usable advance is lower than the stated £200,000.
Real proposals may calculate interest differently, charge it for different periods or add further fees. This example is not a quote or a comparison rate. Ask for a dated completion and redemption illustration that uses the actual method, including minimum interest, early repayment and extension terms where relevant.
What makes an exit plan credible?
For a sale exit, show the proposed sale price, the supporting valuation or comparable evidence, the sales plan and the net proceeds after relevant costs and other debt. For a refinance exit, explain which longer-term facility you expect to use and which conditions the business or property must satisfy. A statement that “we will refinance later” leaves the main question open.
Test a slower sale and a lower price separately. For a refinance, test a lower valuation or a lender asking for more evidence. Identify the point at which the plan needs to change and the cash available to manage that change. A fallback is more useful when it is specific enough to assess, rather than another uncertain transaction.
What can affect the completion timetable?
Ask the broker, lender and solicitor to set out their outstanding work. Valuation access, title matters, existing lender information, searches and signed documents can influence the schedule. A marketing claim about speed is not a commitment that your particular purchase will complete by its deadline.
If there is a contractual deadline, tell everyone at the start. Keep a shared list of who owns each requirement and when it must be satisfied. Do not exchange contracts or make a payment on the assumption that an enquiry or indicative discussion has made finance certain. The written funding conditions and your professional advice should guide that decision.
How does bridging differ from development finance?
A property purchase with limited work and a staged construction project create different funding requirements. Development finance can involve monitored releases against a build programme, while a bridge may address a shorter transaction gap. A specialist needs the actual scope of works to classify and structure the case appropriately.
If the proposal includes construction, provide the budget, programme, permissions and who will deliver it. Explain whether work is cosmetic, structural or a conversion. Understating the scope to fit a simpler product label can leave essential work outside the funding plan.
What should you ask before accepting terms?
Request the full cost for your expected exit date, the cost if it is delayed, the security requirements and the conditions for drawing funds. Ask what happens at the end of the term if the planned repayment has not arrived. An extension is something to establish in the agreement, not something to assume will be available.
Felix can record the project brief and discuss a specialist broker introduction. We do not value property, approve a bridge or promise a refinance. Bring the evidence for the transaction and exit so the next conversation can address the part of the plan that matters most.
Frequently asked questions
Straight answers
Is a bridge a long-term mortgage?
It is intended to address a shorter funding gap. Compare its term and exit requirements with the actual time your project needs.
Does an agreement in principle guarantee completion?
No. Read the conditions and establish what remains outstanding before relying on the funds.
Can interest be deducted from the advance?
Some structures retain interest or fees. Ask for both the gross facility and net amount released.
What if the property does not sell on time?
The outcome depends on the agreement. Discuss delay scenarios, additional costs and any extension process before committing.
Does Funding Felix arrange the valuation?
No. A broker or lender explains the required valuation and legal process for the proposed facility.
Sources and further reading
Where the external facts come from
Sources checked on 27 October 2026. Provider links are references; they do not imply a partnership or an available offer.
- Shawbrook: bridging loans ↗
An example of a lender’s short-term property funding categories; no partnership or offer is implied.
