Bridging finance for a transport depot or yard purchase

A bridge is about speed and timing, not about being a cheaper mortgage. For a haulier, the value is being able to act on an operating base before a slower buyer with slower funding can. The right yard, with the parking, hardstanding, access and workshop space an HGV operation needs, does not come to market often, so when it does, being able to move decisively matters.

Common situations where operators use a depot bridge include:

• Auction purchases. Yards and industrial sites often sell at auction with a fixed completion deadline, usually around 28 days, which is too fast for a standard mortgage. A bridge meets the deadline.
• A chain break. Where your purchase depends on a sale that has not completed, a bridge lets you proceed without losing the site.
• Buying before an existing site sells. If you are relocating and need to secure the new base before your current yard is sold, a bridge covers the overlap.
• A time-limited opportunity. A motivated seller, a lease running down, or an operator centre you must secure to protect your operator licence position.

In each case the point is the same: the deal needs certainty of funds now, and the long-term finance can follow once the site is yours.

A transport operating base is a particular kind of property, and both a bridging lender and your eventual term lender will look at whether the site genuinely works for HGV use. Getting this right at the outset protects your exit.

The features that matter most for a haulage depot include:

• Hardstanding and parking with enough space to turn, park and manoeuvre articulated vehicles safely.
• Access suitable for HGVs, including road access, gradients and gate widths that heavy vehicles can use.
• A workshop or maintenance area, or the scope to create one, for servicing and inspections.
• Offices and welfare facilities for planning, admin and drivers.
• Planning use and licensing. The site's planning position and its suitability as an operator centre for your licence both matter, since a base you cannot lawfully operate from is no use whatever the price.

We flag these points early because a lender's view of the property drives both how much they will advance and how confident they are in your exit onto a term mortgage.

A bridge is deliberately simple: a short-term loan secured against property, priced monthly, designed to be repaid quickly from a defined source.

• Term. Short by design, commonly up to 12 to 18 months, giving you time to complete the purchase and arrange the term facility that repays it.
• Security. A charge over the yard or depot being bought, and sometimes over another property you own if that helps the numbers.
• Interest. Often set to roll up, meaning nothing is payable monthly and the interest is settled at the end, so the bridge does not drain your cash flow while you are also running the business.
• Gross and net loan. The gross loan is the total facility including rolled-up interest and fees; the net loan is what reaches the purchase.

Because a bridge is fast and short, it carries a higher monthly rate than a term mortgage, but over a short period the total cost is modest against the value of securing the right base. The structure is built around getting you in and then getting you out cleanly.

Pricing reflects that a bridge is fast, short-term and secured on property. The main components are monthly interest and an arrangement fee, plus the usual professional costs.

• Monthly interest. Typically in the region of 0.75% to 1.1% per month, depending on the loan-to-value, the property and the strength of your exit. On most cases the interest is rolled up and settled at the end rather than paid monthly.
• Arrangement fee. A percentage of the loan, usually added to the facility rather than paid upfront.
• Valuation and legal costs, which the lender will require as part of securing the loan.

We do not publish a single rate because the price depends on the site, the loan size, the loan-to-value and how solid your exit is. A clear, credible route onto a term mortgage is the single biggest factor in getting a sharp rate, so the stronger your exit, the better the pricing. Tell us the deal and we will give you real figures. Nothing here is financial advice.

A bridge is only as safe as its exit, and with a depot the exit is almost always a refinance onto a longer-term facility once the site is yours and the pressure of the deadline has passed. Planning that exit before you take the bridge is the most important part of the whole exercise.

The usual route is a depot and yard mortgage, a commercial mortgage secured on the operating base and repaid over a longer term out of trading. Because we arrange both the bridge and the term facility, we line up the exit at the same time as the bridge, so the refinance is not a hope but a plan.

• Confirm the term lender's appetite early, so you know the site and your business will support the mortgage that repays the bridge.
• Build in enough time on the bridge term to arrange the refinance comfortably, rather than racing a second deadline.
• Keep the property lettable and lawful for HGV use, since that underpins the term lender's valuation and their willingness to lend.

Occasionally the exit is a sale instead, for example where the bridge covered an overlap while your old yard was on the market. Either way, we set the exit at the start so the bridge clears cleanly.

A depot bridge solves one problem: securing an operating base quickly. It is not your long-term property funding and it is not for buying vehicles or running the business, so it works best as a short, deliberate step within a wider structure.

• The natural companion is a depot and yard mortgage, which is the term facility the bridge refinances onto once the site is yours.
• Fund the trucks and trailers themselves through fleet asset finance and truck HP and leasing, keeping vehicle costs matched to their working life rather than tied up in property funding.
• Keep day-to-day running costs on working capital and invoice finance for haulage, so the bridge and mortgage do not have to stretch to cover cash flow.

Because we arrange the full range across the transport sector, we can plan the bridge, the term mortgage and your working capital together, so the short-term loan is a clean bridge to a settled, well-funded base rather than a risk in isolation.

To get a quick view, send us the basics: the yard or depot you are buying, the purchase price, how fast you need to complete, whether it is an auction or a chain break, and your intended exit. We will tell you whether a bridge fits, sketch the likely cost and term, and set out the route onto a term mortgage that repays it.

We arrange bridging for limited companies acquiring commercial operating premises in the transport and logistics sector, acting as an arranger and introducer rather than a lender. This kind of commercial bridging is not regulated by the Financial Conduct Authority. Some agreements, such as lending to sole traders or individuals, can be regulated, and we refer those to an appropriately authorised firm. Nothing on this page is financial, tax or legal advice, and you should confirm the planning and operator-licence position for any site with your own advisers. Contact us when you are ready and we will move at the pace your deal needs.