Every bridging facility is, by definition, temporary. It is a bridge to something — a sale, a refinance, a completion, a planning consent, a change of circumstance. The single most important discipline in commercial bridging is not the choice of lender or the negotiation of the rate. It is the identification of a credible exit, in writing, before a single line of the application is drafted.
This is what DGL Commercial Finance means by Funding with the End in Mind. The exit is not a formality tacked onto a credit paper. It is the reason the facility exists, and it is the test every recommendation must pass.
The six credible exits.
In practice, almost every well-structured commercial bridge exits through one of six routes. The question is not whether an exit exists — the question is whether the exit is credible on the timeline the lender is being asked to underwrite.
1. Refinance to a term facility.
The most common exit. A bridge is taken to secure an asset quickly — at auction, off-market, or ahead of a competing bid — and repaid on completion of a longer-term commercial mortgage. The test here is simple: would a term lender advance against this asset on these fundamentals, and can it complete inside the bridge term with a realistic margin?
A refinance exit is credible only if the term case has been modelled at the point of drawdown, not the point of maturity. Rental cover, tenant covenant and lender appetite move; the exit that looked obvious in month one may not exist in month eleven.
2. Sale of the underlying asset.
A trading exit — the client intends to sell the property inside the bridge term. This is legitimate, and often the right answer, but it must be stress-tested against realistic marketing periods, price reductions and the possibility of the sale collapsing. A three-month sale plan on a specialist commercial asset is not a plan; it is a hope.
Where sale is the exit, DGL builds a downside case into the recommendation: what happens if the property has not sold at month nine? Is there a refinance option in reserve, and has it been sized?
3. Sale of a business or trading interest.
Common where a bridge is raised against a commercial property held by a trading company facing a shareholder exit, a management buy-out or a strategic sale. The exit is the proceeds of the corporate transaction, and the bridge sits on the property as security while the corporate work completes.
These cases are almost always adviser-led, and the packaging needs to reflect the corporate timetable — heads of terms, exclusivity periods, warranty caps — not just the property fundamentals.
4. Refinance into development finance.
A specific and often mis-structured exit: the bridge acquires the site, and development finance takes it out on the point of drawdown. The credibility test here is planning, cost and lender appetite in combination. A development refinance is not a real exit until the scheme has a signed set of accounts, a QS-verified appraisal and at least an appetite letter from a named senior lender.
Where the development exit is credible, the correct recommendation is often not a standard bridge but a bridge with a defined path to a development facility — and, where appropriate, a development lender who is prepared to underwrite both stages.
5. Planning uplift.
A bridge taken against a site with existing use value, exited on the grant of planning consent that materially changes the value of the asset. This is a legitimate exit — but only where the planning strategy is real, the consultants are engaged and the timeline has been checked against the relevant local authority.
Planning gain is one of the areas in which the market most often over-promises. DGL will not recommend a bridge on a planning exit without a written note from the planning consultant setting out the strategy, the risks and the expected determination date.
6. Portfolio restructuring.
A bridge used to release equity from one asset or a group of assets to complete a wider portfolio reorganisation — a consolidation onto a single term facility, a partial disposal programme, or the restructuring of a group of holding companies. The exit is the completion of the reorganisation, usually a portfolio term refinance.
These are cases where the adviser network matters most. Accountants, solicitors and IFAs are typically active in the transaction, and the funding element must be sequenced around their work — not the other way around.
How DGL structures the exit.
Before any lender is approached, DGL sets out the exit in writing. The document names the exit, sizes it, tests it against a realistic timeline, and identifies the fallback if the primary route slips. It is shared with the introducing adviser. It is agreed with the client. Only then does the case move to packaging.
This is not a formality. It is the discipline that separates a well-structured facility from an expensive mistake — and it is the reason the majority of DGL's work comes through introduction from professional advisers who have seen the process at close quarters.
Every bridge should begin with a credible exit strategy. If the exit does not exist in writing, the facility does not exist.
Next in the DGL Insights series: Bridging Finance vs Development Finance — how to choose the right structure for a property project.