# How a Bridging Loan Works, Step by Step Source: https://www.cashbookfinance.co.uk/bridging-loan-guide Last updated: 2026-10-26 Publisher: Cashbook Finance Limited > Understand UK bridging loans for business and investment property, including security, LTV, timing, costs and why a credible sale or refinance exit matters. FCA-registered UK lender FRN 782472 ## Short-term property funding built around a defined exit. “Bridging loan” and “bridging finance” describe the same core structure: a short-term facility secured against property and repaid through a documented sale, refinance or other credible route. Cashbook Finance provides business bridging only, secured on business or investment property. It does not offer regulated bridging loans secured on a home the borrower or a close family member lives in. 3 tests · Is this bridge workable? Illustration Security · time · exit Workable on these figures - 01 **Evidence the security** 65% loan-to-value · Within 70% - 02 **Allow enough time** Exit in Month 9 of 12 months · 3 months spare - 03 **Define the exit** Repaid by a documented route · A sale Loan-to-value · 65% Exit expected in · Month 9 Term 6m 12m 18m Exit Sale Refinance Illustrative only: a 70% loan-to-value reference and a three-month margin before the term ends, as our guides recommend. Bridging finance is secured against property. Check eligibility £30m+ - **Funded since 2019** 3–24m - **Short-term, secured against business or investment property** 1 exit - **A documented sale or refinance** 100+ - **UK businesses since 2019** - FCA **782472** - ICO **ZB545200** - Companies House **10723098** Structure first ### Three tests determine whether a bridge is workable. #### Evidence the security The lender assesses the property, title, proposed charge position and valuation. The available amount is shaped by loan-to-value and the risks in the transaction. #### Allow enough time Bridging is designed for a temporary timing gap. Legal work, valuation and evidence still matter; “fast” does not mean undocumented. #### Define the exit The repayment route must be credible before completion. Typical exits include a property sale or refinance onto longer-term funding. Check eligibility · About 2–3 minutes, no credit search. Fit and limits ### Use a bridge for transition, not permanent uncertainty. Common uses · and limits #### Where a bridging loan may fit - Auction or purchase deadlines - Time-sensitive investment purchases and delayed sale proceeds - Light refurbishment before sale or refinance - Business capital secured against property - Temporary refinance while longer-term funding completes Sounds like your deal? Check eligibility New to the terms? [Bridging finance glossary](https://www.cashbookfinance.co.uk/insights/bridging-finance-glossary) #### Where it usually fails A bridge is not a substitute for weak affordability, an uncertain valuation or an exit that depends on hope. It is also a poor fit where permanent debt is needed but no realistic refinance route exists. - **Exit strategy guide** - **LTV guide** - **Valuation guide** From enquiry to exit ### A simple sequence, with evidence at every stage. #### Initial structure Before terms Set out the property, amount required, timing, charge position and intended repayment event. #### Valuation and legal work Before completion Confirm access, title information, existing security and the documents needed to support underwriting. #### Completion and repayment Before repayment Use the agreed term to reach the documented sale or refinance, with sufficient margin if the timetable moves. Start an application · Or [work out the costs](https://www.cashbookfinance.co.uk/bridging-finance#bridge-calculator) first. Operational detail #### A practical guide to the full bridge lifecycle This page focuses on the sequence from initial fit to repayment, while the [main product page](https://www.cashbookfinance.co.uk/bridging-finance) contains the calculator and current application route. For property transactions in the capital, see our [London bridging finance guide](https://www.cashbookfinance.co.uk/bridging-loans-london). - **Before terms** Confirm property, purpose, amount, deadline, borrower contribution and exit. - **Before completion** Complete valuation, legal due diligence and source-of-funds checks. - **Before repayment** Track the sale or refinance milestones before the contractual term becomes tight. Which suits you ### Is a bridging loan the right tool? | Your situation | Usually the better fit | Why | | --- | --- | --- | | A purchase deadline before a sale or refinance | Bridging loan | Speed with a defined exit | | Long-term ownership with income | Commercial or buy-to-let mortgage | Cheaper over years | | Works needed before a mortgage is possible | Refurbishment bridge, then refinance | Fix, then refinance | | Cash flow gap from unpaid invoices | Invoice finance | No property security needed | Worked example ### A bridging loan, costed. A business borrows £260,000 against a £400,000 investment property and repays it by refinance in month 8 of a 12-month term. The exit date drives the cost: plan it with room to spare inside the term. Check eligibility · Talk it through with a director | Property value | £400,000 | | --- | --- | | Gross loan (65% loan-to-value) | £260,000 | | Arrangement fee, 1%, from the loan | £2,600 | | Interest at 1% a month, rolled up, for 8 months | £20,800 | | Repaid at exit (loan plus interest) | £280,800 | | Cost before valuation and legal fees | £23,400 | | If the exit is 3 months late | +£7,800 in interest | Illustrative: interest at 1% a month, rolled up, and an arrangement fee of 1% of the loan. Valuation and legal costs are extra and quoted per case. Bridging finance is secured against property, which may be repossessed if repayments are not maintained. #### Official sources - Regulated Activities Order 2001, article 61 (regulated mortgage contracts) legislation.gov.uk - Financial Services Register: Cashbook Finance, FRN 782472 · FCA Official guidance and legislation on the rules this page refers to. They explain the rules in general; take advice on your own position. Quick answers ### Common questions. Check eligibility · All questions **How quickly can a bridging loan complete?** Often within days to a couple of weeks, depending on the valuation and legal work. **How much can I borrow?** It depends on the valuation, the property and the exit. Our examples use a 70% reference loan-to-value. **Do I make monthly payments?** Usually not: interest is often rolled up and repaid with the loan at exit. **Do you lend on homes?** No. We provide business bridging on investment and commercial property. Can’t see your question? Talk it through with a director Next step ### Test the property, amount and exit together. Understand the costs --- Cashbook Finance. Cashbook Finance Limited is registered with the Financial Conduct Authority under Firm Reference Number 782472. Company number 10723098. Registered office: Cumberland House, 24–28 Baxter Avenue, Southend-on-Sea, Essex SS2 6HZ. Registered with the Information Commissioner’s Office under reference ZB545200. All finance is subject to eligibility, satisfactory due diligence, credit approval and agreed terms. Invoice finance, trade finance and bridging finance may not be suitable for every business. The availability, structure, amount, pricing, fees, security requirements and completion timescales of any facility will depend on the applicant’s circumstances, the quality of the supporting evidence provided and our assessment of the proposed transaction. Any figures, examples, rates or timescales shown on this website are for illustrative purposes only and do not constitute an offer, commitment or guarantee of finance. Terms and conditions apply. Bridging finance is secured against property. Your property may be repossessed if you do not maintain repayments on a loan secured against it. Applicants should obtain independent legal, financial and tax advice where appropriate.