Buying land, starting a development or raising capital for a project doesn’t always go to plan. Funding can take time, and opportunities don’t always wait. That’s where a bridging loan can help. It’s short-term finance that releases funds quickly so you can keep your plans moving.

A bridging loan gives you access to money while you wait for funds from another source, such as a sale, refinance or new funding facility. It’s secured against property or land and often used by developers, investors and business owners who need flexibility to buy, build or reinvest without delay.

Because interest is usually rolled up and repaid at the end of the term, bridging loans can also help ease short-term pressure on cash flow while you focus on your next stage of growth.

If you’re exploring your options or want to understand how bridging loans work, this guide explains what they are, when they’re useful and the key things to consider before applying.

What Is a Bridging Loan?

A bridging loan is a short-term finance solution that helps businesses, developers and investors access funds quickly while waiting for other capital to come through. It’s often used to buy land, start a development or inject cash into a project without having to wait for a sale or refinance to complete.

Instead of putting plans on hold while funding catches up, a bridging loan lets you move ahead and repay once your exit is ready. The loan is usually secured against property or land and runs for a few months up to around two years, with interest often rolled up and repaid at the end of the term.

At its simplest, a bridging loan is exactly what it sounds like: a practical way to bridge the gap between needing finance now and receiving it later.

How Does a Bridging Loan Work?

A bridging loan gives you quick access to funds that are repaid once your exit is ready. That exit might be a property sale, a refinance or the release of other capital. Because the loan is secured against land or property, it can often be arranged much faster than traditional finance.

The lender will look at the value of the asset, how long you’ll need the funds for, and your exit plan. Once approved, the money can be released within days, which makes bridging a practical option when a deal or project can’t wait.

Most commercial bridging loans run between six and twenty-four months. Interest is rolled up and paid at the end of the term, so there are no monthly repayments to manage while the project is underway. That flexibility helps keep cash flow healthy while you focus on the work in front of you.

For example, a developer might use a bridging loan to buy land while waiting for planning approval, or an investor might use one to refurbish a property before refinancing. Once the project’s complete or the asset is sold, the loan is repaid in full.

When Should You Use a Bridging Loan?

A bridging loan can be useful any time there’s a gap between when you need funds and when longer-term finance becomes available. It’s often used by property developers, investors, and business owners who need to move quickly on an opportunity that can’t wait.

You might use a bridging loan to:

• Buy land or development sites. Bridging finance can help you secure a site fast while you wait for planning approval or a longer-term facility to complete.
• Fund a property refurbishment or conversion. Developers and investors often use bridging loans to cover renovation costs before refinancing onto a buy-to-let or commercial mortgage.
• Support business cash flow. Companies can release equity from owned property to invest in growth, manage short-term costs, or take advantage of new opportunities.
• Purchase property at auction. Auctions often require completion within weeks. Bridging gives you the funds to secure the property first and sort your main finance later.
• Cover project costs while waiting for a sale or refinance. If funds from another project or asset are still tied up, bridging finance can keep things moving in the meantime.

Since bridging loans are secured against property, you might find it useful to read more about the difference between secured and unsecured loans before deciding which option fits your situation best.

Are Bridging Loans a Good Idea?

A bridging loan can be a good idea if you need short-term finance and already have a clear plan for how you’ll repay it. They’re often used by developers, investors and business owners who want to move ahead with a project while waiting for longer-term funds to come through.

You might use one to buy land, fund a refurbishment or release equity from property to support cash flow. The key is to have a clear exit in place, such as a sale or refinance, that will repay the loan once the project is complete.

It’s also important to weigh up the costs. Bridging loans tend to have higher interest rates and fees than standard business finance, and because they’re secured against property or land, timing really matters. Make sure your exit strategy is realistic and that you’ve allowed enough time for everything to complete.

Used carefully, a bridging loan can unlock capital fast and help you keep your plans on track. It offers flexibility, speed, and breathing room when you need it most.

• Want to learn about another form of short-term finance? Read our guide on asset finance to see how it compares to bridging loans.