The Intermediary – March 2026 - Flipbook - Page 65
BRIDGING
Opinion
Embracing the
grey area
T
he need for short-term
capital rarely arrives at
convenient moments.
Bridging plays a critical
role in providing the
flexibility needed when
opportunities or challenges appear
quickly. This is especially the case
for established businesses, which
rarely fit a traditional lending mould.
Cashflow is not a perfect science, and
seasonal paerns oen come into play
– lenders must work outside the lines
when it comes to gauging potential.
Offering certainty
This sentiment was reflected in our
2025 H2 survey of 580 commercial
brokers. 55% of bridging brokers
expressed some level of confidence in
the finance market, compared to 39%
of commercial mortgage brokers.
One contributing factor may
be a growing demand for fast and
flexible funding. As established
businesses continue to see reduced
access to funding from high street
banks, leading to a £65bn business
lending gap, they are forced to look at
other options.
In this environment, bridging
products – and particularly bridgeto-term structures – can provide
much needed certainty. With an exit
agreed upfront, clear timelines, and
predictable valuations, established
businesses can focus on their delivery,
rather than refinancing.
Finding a bank that goes all in on a
business during these times is crucial.
It means recognising that it has great
fundamentals, even if the property
isn’t perfect – because they almost
never are. Providing that support frees
up business owners to plan investment
and a longer-term strategy.
A human-first approach
Lending needs to reflect the real world,
not the ideal – understand the ‘why’ of
the customer, not just the figures on a
spreadsheet. In bridging, where cases
can have multiple eccentricities, this is
especially important.
When we asked our brokers the
primary reasons their clients seek
bridging finance, the most common
was light to medium refurbishment
projects (55%) – up from 45% in H1
2025. The remaining categories –
investment, development projects,
heavy refurb and residential
purchases – each represented
approximately 35%.
In the established business sector
where there has been too lile support
for too long, it’s great to see business
owners focusing on growth and
working with brokers and lenders
who support them and their business.
Saving time with tech
Bridging has always been synonymous
with speed and flexibility – it is not an
option business owners go for when
time is on their side.
I see first-hand how much
importance my team at Allica places
on using technology to help us achieve
this much-needed speed, and we have
invested heavily in our technology to
ensure the broker journey is as quick,
simple and transparent as possible.
It was reassuring to see that more
than half of all brokers feel that AI
has impacted the lending journey
positively, with clear improvements
seen across speed and efficiency
– up from 46% in the first half of
2025. Bridging finance saw even
stronger results, with 59% expressing
positive experiences.
Outside the box
When structuring bridging finance,
product choice maers, but lender
approach maers more. In my
experience, the main consideration
is to find a banking partner that can
step out of the ‘black and white’ binary
and join their client in the grey area
to truly understand the business, its
long-term value, and the expertise of
its owners and managers.
STEVE PALFREEMAN
is head of bridging sales
at Allica Bank
One example that illustrates this
involved a five-floor commercial
building, financed at a 65% loan-tovalue (LTV).
Aer receiving planning approval
to convert the building into offices,
the client refinanced their original
bridging loan. They moved onto a
bridge-to-term Improver facility,
which included an additional £3.2m
refurb fund arranged over a 2-year
bridge. This timeframe will allow
them to complete the renovation
works, aract tenants, and start
generating rental income before
moving onto a 5-year term loan.
Most commercial properties are far
from simple, with refurbishments
to plan, tenants to find, and income
to stabilise. Luckily, bridge-to-term
was built to reflect how commercial
property actually works – helping
brokers to support their established
business customers and give them
the confidence to keep growing
and investing.
Time to commit
Growth in bridging is driven by the
need for fast, flexible funding, and
many brokers anticipate increased
activity throughout the year.
What brokers and business owners
must now avoid in a crowded lender
landscape is slow decisions and
challenging exits. Securing bridging
finance with a clear exit strategy – one
that reduces risk and covers both the
bridge-to-term and the agreed next
stage – is key.
For brokers seeking bridging
finance, time is a luxury they do
not have. A commitment to fast and
flexible lending is what will turn
our brokers’ predicted growth and
confidence into tangible success for
the established business sector. ●
March 2026 | The Intermediary
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