How to Get a Bridging Loan for your Business in 2025

Summary

• Fast, short-term finance from £27,500 to £3 million
• Up to 75% LTV, terms from 1–24 months
• Ideal for property purchases, tax bills, equipment, or cash flow gaps

In this guide, we’ll walk you through what bridging loans are, how they work, the difference between regulated and unregulated options, and how to apply. Whether you’re a first-time borrower or looking for a faster way to fund your next venture, this step-by-step breakdown will help you decide if bridging finance is right for your UK business in 2025.

Contents

• What is a Bridging loan?
• What’s the difference between a regulated and an unregulated Bridging loan?
• What can a Bridging loan be used for?
• How much can I borrow?
• A Step-by-Step Guide to geting a Bridging Loan
• Case Study
• FAQs

What is a Bridging loan?

A Bridging loan is a short-term loan, secured over a property, designed to “bridge” the gap between finance. This could be a cashflow gap between the purchase of a property and the sale of another, or funds needed to buy stock / equipment for your business.

Features:

• Short Term - Bridging loans are designed for much shorter periods than traditional mortgages, typically lasting anywhere from 1 to 24 months.
• Fast Access to Funds - Typically, loans can be arranged and funds released much quicker than mortgage.
• Higher Interest Rates - As the loan is short term and higher-risk, the interest tends to be higher.

What’s the difference between a regulated and an unregulated Bridging loan?

Unregulated Bridging Loan - The funds are used for business purposes, for example buying new equipment or starting a new business venture.

Regulated Bridging Loan -The funds are required for personal use such as a renovation on the borrowers primary home.

What can a Bridging loan be used for?

Somo offers unregulated Bridging loans for any business purpose, from the most standard cases to the weird and wonderful. As long as funds are used for business use, we’ll always look to lend. Just some examples include:

• Purchase a property
• Purchase business equipment
• Refurbish a buy-to-let
• Auction purchase
• To raise money for another business venture
• Pay a tax bill
• Other cashflow gaps

How much can I borrow?

• Loan-to-Value (LTV)

Bridging lenders typically lend based on the value of your property being used as a security. This can range from 50-80% loan-to-value (LTV) depending on the lender, meaning you can borrow up to 80% of the value of the property but most unregulated lenders cap their LTV at 75%.

For example, a borrower with a property worth £1,000,000 at 75% LTV would be able to borrow up to £750,000.

• Value of Security

As the loan is based on the value of the property, you will never be able to borrow more than it is valued at. However, Some lenders will offer up to 100% LTV if there is an additional security property to lend against.

• Typical Borrowing Ranges

At the lower end, Bridging loans can start at anywhere between £5,000 - £30,000. High value bridging loans can be in the millions, with some specialist lenders offering up to £250 million.

Somo lends between £27,500 to £3million, depending on the value of the security, the LTV and the business purpose.

A Step-by-Step Guide to Getting a Bridging Loan

You’ve got options when applying for a bridging loan: you can either work with a broker who’ll help you find the best lender for your needs, or go straight to the lender yourself.

Somo partners with thousands of brokers across England and Wales who can guide you through the process and support your application.

Want to get started today? Get an offer in as little as an hour by filling out our short application here.

1. Apply for a Loan

Before you can receive a loan offer, the lender will need you to provide the following information:

• Loan purpose - What are the loan funds going to be used for? For example, to buy equipment/stock for your business, purchase an investment property or pay a tax bill.
• Property Value - What is the value of the property you intend to secure the loan against?
• Exit Plan - How do you plan to pay back the loan? For example, property sale or refinance.
• Credit History - What is your current credit status? Although Somo, and some other lenders, will still lend to those with adverse / bad credit, this information helps the lender calculate the interest rate.
  
  

2. Decision in Principle (DIP)

Once the lender has all of the above (loan purpose, value of the property, exit plan and credit history), they can provide you with a Decision in Principle (DIP). This is not a final offer but indicates they’re willing to lend.

3. Loan Offer

To provide a full offer, the lender will require further information including personal/business details, details of the security property, proof of exit strategy (not always required), legal documents (ID, title deeds, mortgage info).

4. Underwriting, Valuations and Legals

Once you have agreed to the loan terms, the case will progress to the Lenders Underwriting department:

• Document Review 

The Underwriter will review all the documents provided for the case including ID/Passport, exit strategy evidence (e.g. property sale agreement, refinance offer), business financials, existing mortgages or secured loans on the property.

• Security Assessment

They will instruct a valuer to assess the property and provide a Valuation report, considering whether the title is clean and if there are any risks e.g. planning issues, structural planning.

• Risk Evaluation

The underwriter evaluates the overall risk of the loan, including the loan-to-value (LTV) ratio, your credit history, whether your exit strategy is realistic and current market conditions (for example, if property values are falling)

• Decision and offer

Once everything checks out the lender will issue a formal offer letter and instruct solciors to begin legal. If any concerns arise, the lender may request more documents or adjust the loan terms (e.g. lower LTV, add a guarantor).

In short: underwriting is the lender's due diligence - making sure your loan makes sense, is legally secure, and can be repaid as planned. The faster you provide clear documentation, the quicker this stage moves.

5. Receive Funds

Once legal work is done, funds are released - often within days, but some can complete in as little as 72 hours.

Case Study

• Loan Amount: £215,250
• LTV: 75%
• Rate: 0.89% pm
• Term: 6 months
• Loan Purpose: Auction Purchase of a 6-Bed HMO
• Exit Plan: Resale of the Property

The borrower had secured a 6-bedroom HMO at auction when their original lender suddenly withdrew.

With the completion deadline fast approaching, they needed a lender who could move quickly and confidently. That’s when Somo stepped in.

Once funding was secured, the borrower began moving forward with renovations and intends to sell the property as their planned exit strategy at the end of the 6 month loan term.

We have offer different products dpending on the case. Find out more about our loan products and criteria here.

FAQs

How much can I borrow?

Somo can lend from £27,500 up to £3 million, depending on the value of the property security.

How long can I borrow for?

We offer loans terms between 1-24 months.

Can I get a Bridging loan with bad credit?

Yes! Somo offers fast, flexible bridging loans for borrowers with adverse credit, including those with missed payments, CCJs, or defaults. Our Valuation Only™ allows us to lend based on property value, not the borrowers credit score, income, or affordability. 

How do I apply for a Bridging loan?

Get an offer in as little as an hour by filling out our short application here.

If you prefer to speak to one of our team directly, we’re available to call Monday-Friday 8:30am-5:30pm. Call 0161 312 5656 or book a call with one of our team at a time that suits you.