Bridging finance: capital that covers the gap between two dates

What does “bridging” really mean?

Every bridging loan has two ends. On one side is a date when you need money — a settlement, a tax deadline, a deposit. On the other side is a date when money is coming — a property sale settling, a bank refinance being drawn, a big customer payment arriving. Bridging finance is the span between them.

That’s what makes it different from ordinary working capital. You aren’t borrowing because the business is short in general. You’re borrowing because two events are out of sync, and you can point to the one that will repay the loan.

Where do businesses use bridging finance?

• Property timing. Buying new premises before the old ones sell.
• Bank finance running late. The bank has approved a loan but won’t be ready by settlement day.
• Waiting on a payment. A large progress claim, insurance payout or asset sale is due, but a bill lands first.
• Business purchases. Completing on time while the longer-term funding is arranged (buying a business).
• Deposits. Securing a commercial property with a deposit before the main loan is in place (commercial property deposit).

How fast can bridging finance land?

Structure	Possible timing	Typical use
Caveat loan	$20k–$250k same day	Very short bridges, urgent settlements
Second mortgage	Same day possible for smaller amounts	Leaving the home loan in place
First mortgage	Up to $5m within 24–48 hours	Larger bridges, unencumbered property

All three depend on the same ingredients: a clean title, owners available to sign, and an exit the lender believes.

Why is the exit everything?

A bridging lender’s real security isn’t just the property — it’s the event that repays the loan. So it will want to know:

1. What the exit is — sale, refinance, payment.
2. When it’s expected, and how firm that date is.
3. How much it will produce after costs.
4. What happens if it’s late.

Exits that come with paperwork — a signed contract of sale, a formal bank approval, a written payment schedule — get funded fastest. A plan to “sell sometime next year” is a much harder conversation.

An illustrative example

A joinery business has agreed to buy a larger factory, settling in three weeks. Its existing factory is under contract to sell, but that sale settles in ten weeks. The bank will fund the new factory only once the old one is sold. A bridging loan secured over both properties covers the purchase on time; when the old factory settles, the sale proceeds repay the bridge and the bank’s longer-term loan takes over. (Illustrative only.)

If your dates don’t line up, tell us both of them and we’ll look at the gap.

What does bridging cost?

Bridging is priced on the property, the amount, the term and the strength of the exit; we don’t publish rates. Plan for establishment and legal costs, interest (some facilities allow it to be prepaid or added to the loan), and any extension costs if the exit slips. The test: is the cost of bridging smaller than the cost of missing the date — a lost deposit, a failed settlement, penalties or a lost deal? Usually it’s not close.

How to keep a bridge short

• Put a margin of a few weeks between the expected exit and the end of the term
• Keep the refinance or sale moving — the bridge is not a reason to slow down
• Agree with the lender in advance how an extension would work
• Don’t add new purposes to the bridge once it’s running

Common bridging scenarios in detail

Buy before you sell. You find new premises before the old ones are sold. The bridge funds the purchase; the sale repays the bridge. Key risk: the sale takes longer or achieves less than expected.

Bank running late. The bank has approved the loan but its settlement process won’t meet your contract date. The bridge completes on time; the bank loan repays it a few weeks later. Key risk: the bank’s approval has conditions you haven’t met yet.

Payment pending. An insurance payout, asset sale or large contract payment is due, but a bill lands first. Key risk: the payment is delayed or disputed.

Business purchase. Settlement is fixed; longer-term finance is still being arranged. Key risk: the long-term lender wants a trading history in your name first.

In each case, the strongest bridges have written evidence of the exit and a buffer of time beyond the expected date.

What if the exit falls short?

Plan for the possibility that the exit produces less than expected — a property selling below the hoped-for price, a refinance approving a smaller amount. Ask yourself:

• What’s the shortfall I could absorb from cash or other assets?
• Could part of the bridge be converted to a longer-term facility?
• Is there another property or asset that could support an extension?

Lenders will ask these questions too. Having answers ready speeds approval and protects you if things don’t go perfectly.

Two dates that won’t line up?

That’s exactly what bridging finance is for. Asking costs nothing and doesn’t involve a credit check, and your details aren’t sent to a long list of lenders — one person works through your timing and calls you. Tell us both dates, the property and the exit as accurately as you can, so we can say straight away whether the bridge works. See if your bridge qualifies.