The UK bridging finance market has received a significant vote of confidence with specialist lender ScotLend securing a £20 million facility from Shawbrook to bolster its national footprint. This substantial funding injection, which will support loans ranging from £30,000 to £2 million across the UK, represents Shawbrook's first transaction supporting a Scottish-based lender—a clear signal of growing institutional confidence in the bridging sector's potential.[1]
This development comes amid broader market expansion, with the Bridging & Development Lenders Association (BDLA) reporting that bridging completions reached a record £1.79 billion in Q3 2024, marking a 2.6% increase from the previous quarter. The total loan book value has surpassed £9 billion for the first time, growing by 7.6% to £9.01 billion, while applications rose by 6.7% to £10.9 billion.[2]
The market's resilience is further evidenced by steady gross lending figures. In 2024, total gross bridging lending was £822 million, just below the record £831 million in 2023, making it the second-highest lending volume since 2015. Notably, the average completion time for bridging loans decreased by 23% year-on-year, dropping from 58 days in 2023 to 47 days in 2024, reflecting enhanced operational efficiency within the sector.[22] This efficiency gain coincides with a significant 12.3% increase in average loan values, rising from £1.21 million to £1.36 million, demonstrating both market strength and lender confidence in taking on larger exposures.[2]
Market projections further underscore this trajectory, with Mintel's UK Bridging Loans Market Report forecasting the market to reach £10.9 billion by the end of 2024, with an anticipated 25% growth over the next five years. This growth projection is based on comprehensive analysis of market trends, consumer behavior patterns, and economic indicators that suggest sustained demand for flexible, short-term financing solutions in the property sector. The report highlights that this expansion is primarily driven by the sector's ability to provide timely and flexible financial solutions, attracting increasing confidence from brokers and borrowers alike.[3]
The UK bridging finance sector has experienced significant expansion, with the total value of bridging loan completions reaching £4.94 billion in 2022, up from £4.2 billion in 2021. Projections indicate this figure will rise to £5.59 billion by 2025, according to Finbri's Bridging Finance Report 2023.[23]
As bridging lenders experience this surge in market activity, the operational infrastructure supporting loan origination becomes increasingly critical. The ability to process higher application volumes efficiently, without compromising on speed or quality of service, will determine which lenders can capitalise on these market opportunities and which will struggle to keep pace.
Despite the promising market outlook, many bridging lenders continue to operate with outdated loan origination systems (LOS) that create significant operational bottlenecks. These legacy systems, often characterised by manual processes and disconnected workflows, are increasingly becoming a competitive liability in a sector where speed and efficiency are paramount.
Recent industry analysis highlights that outdated LOS platforms are falling behind, with manual processes causing operations to slow down, increase costs, and frustrate borrowers.[4] For bridging lenders, where rapid decision-making can be the difference between winning and losing business, these inefficiencies directly impact the bottom line.
The consequences extend beyond mere operational inconvenience. In the time-sensitive bridging finance sector, delays in application processing can lead to lost deals, damaged broker relationships, and diminished market reputation. As loan volumes increase with market expansion, these inefficiencies become exponentially more problematic, creating a widening gap between market leaders and those struggling with outdated technology.
Specifically, legacy systems with poor integration capabilities create data silos that require manual workarounds and duplicate data entry, preventing a unified view of customer information across the lending lifecycle. Additionally, they limit the ability to quickly adapt lending criteria and workflows without IT dependency, severely hampering responsiveness to market changes and competitive pressures.
The limited automation in underwriting and risk assessment processes forces reliance on manual reviews, increasing processing times and leading to inconsistent decision-making. This is particularly problematic as application volumes grow, with the BDLA reporting a 6.7% increase in applications to £10.9 billion in Q3 2024.[2]
Real-world implementations demonstrate the tangible impact of modernizing loan origination systems. For instance, Alta West Capital achieved a 30% decrease in underwriting duration after implementing an advanced Loan Management System (LMS) to automate their underwriting process and improve borrower communication.[9] Similarly, AltCap, a community development financial institution, reduced loan processing times by 30% after adopting a sophisticated LMS to automate various stages of their loan process.[10]
Financial services firms like Gaia, a UK-based lender focused on making IVF treatments accessible, have reported significant operational benefits after implementing modern loan management software. Gaia required a scalable solution capable of handling multi-currency operations and providing real-time data access to manage their growing portfolio without expanding their team. By implementing an automated loan management system, they achieved efficient multi-market loan management while maintaining full control over their data without increasing administrative overhead.[14]
As bridging lenders seek to modernise their loan origination capabilities, understanding the essential components of a contemporary LOS becomes critical for making informed technology investments. A modern system must deliver several key capabilities to support the unique requirements of bridging finance.
First and foremost, the system must enable smarter, faster decisions through automation and data-driven insights. This is particularly crucial in bridging finance, where speed is often a key competitive differentiator. The right LOS should strengthen fraud protection while providing frictionless engagement at all levels of the business, from front-line staff to senior management.[4]
Equally important is the ability to customise workflows without extensive technical expertise. Modern systems should come with administrative tools that allow bridging lenders to adapt processes and decision points without requiring extensive coding or IT support. This capability enables rapid response to changing market conditions and regulatory requirements—a significant advantage in the dynamic bridging finance sector.[4]
Beyond these core capabilities, modern LOS platforms must incorporate advanced fraud detection mechanisms to protect against increasingly sophisticated threats. According to industry research, Point Predictive's fraud consortium has surpassed 650 members, including lenders, banks, fintechs, and dealer groups nationwide. This consortium has analyzed over 270 million applications representing over $4 trillion in origination value, establishing it as the industry's most comprehensive repository of fraud intelligence.[24] Integration with such consortia can significantly enhance a lender's ability to identify and mitigate fraud risks.
The operational impact of these capabilities is substantial. The bridging sector has already seen a 23% reduction in average completion times, from 58 days in 2023 to 47 days in 2024.[22] Lenders with modern LOS platforms are positioned to further improve these metrics, potentially reducing processing times by additional days or even weeks through automated workflows and streamlined processes.
For bridging lenders, these capabilities directly address the operational challenges that can impede growth. By automating manual processes, they can reduce processing times and operational costs while improving decision consistency. By enabling customisation without technical dependency, they can adapt quickly to market opportunities and regulatory changes.
Does a modern LOS require complete replacement of existing systems? Not necessarily. The most effective approach often involves a strategic modernisation that preserves valuable existing capabilities while addressing critical gaps through targeted technology investments.
For bridging lenders seeking to enhance operational efficiency, seamless integration capabilities represent perhaps the most critical success factor in modernising loan origination. A truly effective LOS must integrate seamlessly with core banking systems, customer relationship management (CRM) tools, and document management solutions to create a cohesive ecosystem that eliminates silos and reduces manual intervention.[4]
Beyond internal systems integration, modern platforms must enable connection with third-party providers via APIs, allowing expansion of capabilities through enhanced fraud detection tools, improved communication channels, or advanced data analytics. This ecosystem approach creates a flexible architecture that can evolve as business needs change, without requiring wholesale system replacement.[4]
The practical implications for bridging lenders are significant. Integration capabilities eliminate the inefficiencies of manual data transfer and duplicate entry that plague many lending operations. They enable a unified workflow that supports the entire lending lifecycle, from initial application through to completion and beyond. Most importantly, they create a foundation for continuous improvement and innovation, allowing lenders to incorporate new capabilities as they become available.
The market impact of integration capabilities becomes particularly evident when considering the competitive landscape. Bridging lenders with well-integrated systems can process applications more quickly, make more informed decisions, and provide a more seamless experience for brokers and borrowers. As market volumes increase, with applications rising by 6.7% to £10.9 billion according to the BDLA,[2] this operational advantage translates directly into business growth and market share gains.
The growing trend of embedded finance further emphasizes the importance of integration capabilities. As businesses increasingly offer loans directly through their platforms, such as online stores providing financing at checkout, seamless integration with loan origination platforms becomes essential.[11] This trend creates both opportunities and challenges for bridging lenders, requiring systems that can connect easily with diverse distribution channels.
Setana, a financial services provider for retail businesses, offers a practical example of integration benefits. Facing inefficiencies due to manual loan tracking processes that hindered their ability to scale operations effectively, Setana adopted an integrated platform to automate workflows and connect with payment processors. This integration led to a significant reduction in manual errors and processing times, enabling faster loan approvals and improved customer satisfaction while allowing them to onboard more retail clients efficiently.[14]
Artificial intelligence represents a significant opportunity for bridging lenders to enhance loan origination efficiency, but adoption barriers remain. A recent report, 'Overcoming the Top Barriers to AI Adoption in Mortgage Lending', reveals what is holding the industry back and how forward-thinking lenders are breaking through these challenges.[5]
The report identifies several key barriers, including cost concerns, compliance considerations, cultural resistance, and customer adoption challenges. For bridging lenders, these insights are particularly valuable as they navigate the complexities of technology modernisation in a regulated environment.[5]
Cost concerns often top the list of adoption barriers, with many lenders questioning the return on investment for AI implementations. However, the report suggests that forward-thinking lenders are addressing this by aligning AI solutions with specific profitability and efficiency goals, creating a clear business case for investment. By focusing on practical applications that deliver measurable improvements in loan processing times, decision accuracy, and operational costs, these lenders are demonstrating tangible ROI from their AI investments.[5]
Compliance considerations present another significant challenge, particularly in the highly regulated lending environment. Bridging lenders must ensure that AI implementations meet regulatory requirements for transparency, fairness, and explainability—a complex undertaking that requires careful planning and governance.
Despite these challenges, the potential benefits of AI for bridging lenders are substantial. AI-powered automation can significantly reduce processing times for routine tasks, freeing staff to focus on complex cases and relationship management. Advanced analytics can enhance risk assessment, identifying patterns and correlations that might be missed by traditional methods.
The integration of AI in private credit markets is increasingly transforming underwriting processes and risk assessment. As Forbes reports, "AI is increasingly utilized in private credit markets to enhance underwriting processes and risk assessment, enabling more efficient and accurate evaluations."[7] This trend is further evolving with the integration of Large Language Models (LLMs) in risk management, enabling real-time monitoring of markets and enhancing dynamic risk assessment and decision-making processes.[12]
In small-business lending, which shares many characteristics with bridging finance, AI-driven underwriting is taking center stage. "In 2025, AI-driven underwriting is taking center stage in small-business lending, with lenders using real-time business performance data and industry-specific metrics to determine creditworthiness," according to Forbes.[13] These advancements offer a glimpse of the potential for AI to transform bridging finance operations.
Research published in April 2025 explores the integration of quantum deep learning techniques into financial risk analysis, presenting a framework for credit risk assessment that combines quantum methods with classical deep learning. This cutting-edge approach represents the next frontier in risk assessment technology, potentially offering bridging lenders unprecedented accuracy and efficiency in evaluating loan applications.[12]
For UK bridging lenders, regulatory compliance represents a critical consideration in loan origination system modernisation. The regulatory landscape continues to evolve, with increasing emphasis on transparency, responsible lending practices, and data protection. Modern LOS platforms must therefore incorporate robust compliance capabilities that adapt to changing requirements without compromising operational efficiency.
The UK's Financial Conduct Authority (FCA) has established specific guidelines for bridging lenders through its Mortgage Conduct of Business (MCOB) rules, which apply to regulated bridging loans. These rules mandate clear disclosure of terms, transparent fee structures, and appropriate affordability assessments. Additionally, the Consumer Duty regulations, which came into effect in July 2023, require lenders to deliver good outcomes for retail customers, placing additional emphasis on product design, customer service, and value assessment.
The UK's pro-growth regulatory approach is creating a supportive environment for technology innovation in financial services. The Digital Regulation Cooperation Forum (DRCF), which includes representatives from the ICO, Ofcom, and the CMA, is focused on building a clear and proportionate regulatory environment that supports innovation while maintaining consumer protections. Kate Jones, CEO of the DRCF, emphasized this balance, stating: "We need a clear and proportionate regulatory environment for industry to maximise opportunities."[25] The FCA's Annual Plan specifically highlights its focus on technology and data, accelerating digital information to improve productivity.
For bridging lenders specifically, regulatory considerations extend beyond traditional lending regulations to include property-specific requirements, anti-money laundering (AML) provisions, and know-your-customer (KYC) protocols. Modern LOS platforms must therefore incorporate flexible compliance frameworks that can adapt to these diverse requirements while maintaining operational efficiency.
The impact of regulatory compliance on operational efficiency is substantial. Manual compliance processes can significantly extend loan processing times, particularly for complex bridging transactions involving multiple parties and security types. By automating compliance checks and integrating regulatory requirements into standard workflows, modern LOS platforms can help bridging lenders maintain compliance while minimizing operational impact.
Alerus, a financial services company, provides a practical example of balancing compliance and efficiency. Facing the need to optimize their loan origination processes while navigating complex regulatory environments, Alerus implemented an advanced Loan Management System to automate tasks such as data entry and document verification. This implementation resulted in a 30% reduction in underwriting time, allowing them to serve clients faster while maintaining compliance with industry regulations.[14]
While customer-facing digital interfaces often receive the most attention, the real enabler of sustainable growth for bridging lenders lies in back-office innovation. Despite advances in mobile apps and user interfaces, many financial institutions continue to be hampered by infrastructure challenges traced back to outdated and siloed back-office systems.[6]
This disconnect between digital front-ends and legacy back-office systems creates a significant operational risk. While borrowers may experience a modern interface during the application process, the underlying systems processing those applications often remain slow, manual, and error-prone. For bridging lenders, who compete primarily on speed and flexibility, this disconnect can severely undermine market positioning.[6]
The focus on innovation must therefore extend to modernising the core systems that power the entire lending lifecycle, from origination and servicing to reporting and integration. This holistic approach ensures that operational capabilities align with market promises, creating a foundation for sustainable growth.[6]
For bridging lenders, back-office innovation delivers several critical benefits. It enables faster processing times through automation and streamlined workflows, reducing the time from application to completion—a key competitive differentiator. It enhances decision quality through improved data access and analytics, supporting more informed risk assessments. Perhaps most importantly, it creates operational scalability, allowing lenders to handle increasing volumes without proportional increases in headcount or costs.
Industry leaders anticipate further growth in capital investment for bridging lenders in 2025, with increasing appetite from funding organizations. However, they emphasize the importance of maintaining disciplined underwriting, effective collections processes, and leveraging data-driven decision-making to appeal to capital providers.[2]
The importance of data-driven decision making cannot be overstated. As industry research indicates, "Lenders are increasingly using data to make informed decisions, with advanced loan origination systems providing tools to understand borrower behavior, identify risks, and improve loan portfolio performance."[11] This trend aligns with the broader movement toward data-driven operations across the financial services industry.
"LendFusion made the transition effortless, and gave us the scalability and automation we needed to grow without increasing our team size."
— CEO of Gaia[14]
This testimonial from a UK-based lender highlights the transformative impact of modern loan management software. Gaia, which focuses on making IVF treatments accessible, implemented LendFusion's solution to automate their loan processes, enabling them to manage loans across different markets efficiently without increasing administrative overhead.[14]
For bridging lenders seeking to enhance loan origination efficiency, the approach to implementation is as important as the technology itself. The global LOS market is projected to reach nearly $10 billion in the next five years, driven by rapid advancements in automation, artificial intelligence, and digital lending solutions.[4] This substantial investment reflects the growing recognition of loan origination as a critical competitive differentiator.
However, successful implementation requires a strategic approach that balances the need for rapid improvement with sustainable change management. Bridging lenders must consider several key factors when planning their modernisation journey.
First, organisational readiness must be assessed honestly. This includes evaluating current processes, identifying pain points, and understanding staff capabilities and change readiness. Without this foundation, even the most advanced technology may fail to deliver expected benefits.
Second, a phased implementation approach often proves more successful than wholesale replacement. By targeting high-impact areas first, lenders can deliver quick wins while building momentum for broader transformation. This approach also reduces implementation risk and allows for learning and adjustment as the project progresses.
Third, ongoing optimisation must be built into the implementation plan. Technology implementation is not a one-time event but an ongoing process of refinement and enhancement. Successful lenders establish mechanisms for continuous improvement, ensuring that their systems evolve with changing market needs and technological capabilities.
Government initiatives aimed at increasing housing supply present additional growth opportunities for bridging finance. Development and refurbishment finance, particularly for converting existing buildings into residential spaces, are expected to play a critical role in addressing the country's housing needs. A stable political environment, coupled with the potential for interest rate reductions in 2025, offers further reasons for optimism, with lower borrowing costs likely to boost activity in the property market.[2]
The strategic importance of loan origination technology is further underscored by recent moves from major financial institutions. Deutsche Bank recently granted its asset management division, DWS, preferred access to private credit deals it originates, enhancing DWS's offerings in alternative assets.[15] Similarly, Goldman Sachs established the Capital Solutions Group to enhance its financing operations and compete with private credit funds.[16] These developments highlight how loan origination capabilities are becoming central to competitive strategy in the broader lending market.
The emergence of hybrid capital solutions offers another strategic consideration for bridging lenders. These solutions are gaining traction, allowing private equity firms to extract dividends from mature portfolio companies without relinquishing control, especially in challenging market conditions. This trend creates opportunities for bridging lenders with the technological capabilities to structure and manage complex financing arrangements.[7]
kennek's end-to-end lending platform exemplifies this strategic approach to LOS modernisation. Built specifically for alternative lenders, the platform combines automation, real-time data, and flexible API infrastructure to streamline every stage of the lending lifecycle. Its modular design allows for phased implementation, enabling lenders to address critical pain points first while creating a foundation for comprehensive transformation.
The £20 million facility secured by ScotLend represents more than just a single transaction—it signals the growing institutional confidence in the UK bridging finance market and highlights the opportunities available to well-positioned lenders. As the market continues its expansion trajectory, with projections indicating 25% growth over the next five years, the operational capabilities that underpin loan origination efficiency will increasingly determine competitive success.[3]
Bridging lenders face a clear choice: continue with outdated loan origination systems that create operational bottlenecks and limit growth potential, or invest in modern platforms that enable scalability, efficiency, and enhanced decision-making. The hidden costs of maintaining legacy systems—including slower processing times, higher operational costs, and frustrated borrowers—are becoming increasingly apparent as market volumes grow.
The essential components of a modern LOS—from automation capabilities to integration flexibility—provide a roadmap for lenders seeking to enhance their operational infrastructure. By focusing on back-office innovation rather than just customer-facing interfaces, lenders can create a foundation for sustainable growth that aligns operational capabilities with market promises.
The operational efficiency gains are tangible: the sector has already seen average completion times decrease by 23% year-on-year, dropping from 58 days in 2023 to 47 days in 2024.[22] Lenders with modern LOS platforms are positioned to further improve these metrics, potentially reducing processing times by additional days or even weeks through automated workflows and streamlined processes.
The ROI of modern loan origination systems extends beyond mere efficiency gains. Financial institutions implementing advanced LMS solutions have reported 30% reductions in underwriting time and loan processing times, enabling them to serve more clients without proportional increases in operational costs.[9][10] For bridging lenders operating in a competitive market with tight margins, these efficiency gains translate directly into improved profitability and competitive advantage.
As bridging lenders navigate this modernisation journey, kennek offers a purpose-built solution that addresses the unique requirements of alternative lending. By combining automation, real-time data, and flexible API infrastructure in a single platform, kennek enables lenders to streamline operations, enhance decision-making, and scale efficiently—critical capabilities in an expanding market.
The opportunity is clear: as the UK bridging finance market continues its growth trajectory, lenders with modern loan origination capabilities will be best positioned to capitalise on increasing demand, deliver superior broker and borrower experiences, and achieve sustainable competitive advantage.
The expansion of the UK bridging finance market underscores a critical need for operational infrastructure that can match this growth trajectory. We observe that while market volumes and average loan values increase, many lenders remain constrained by outdated loan origination systems. These legacy platforms, characterised by manual processes, data fragmentation, and limited integration, fundamentally impede efficiency and scalability. This creates a significant operational challenge, hindering lenders' ability to process higher application volumes swiftly, manage risk effectively, and capitalise fully on market opportunities. We maintain that addressing these back-office inefficiencies is paramount; it is the true enabler of sustainable growth and competitive advantage in a market where speed and precision are non-negotiable.
To navigate this dynamic market successfully, bridging lenders require modern systems that provide automation, real-time data access, and seamless integration capabilities. A platform that streamlines the entire lending lifecycle, from origination through to servicing and reporting, is essential for enhancing decision-making, reducing operational costs, and ensuring regulatory compliance. We believe that strategic investment in robust, flexible technology is no longer a discretionary expense but a foundational requirement. It allows lenders to not only keep pace with market demand but to lead, ensuring they can scale operations efficiently, manage risk with greater accuracy, and ultimately deliver superior outcomes for both their business and their clients.
Xavier De Pauw is co-founder & CFO of kennek, providing complete lending software for alternative credit. With 10 years at Merrill Lynch in structured finance, Xavier co-founded MeDirect Group and MeDirect Bank Belgium, building a €2.5 billion balance sheet. His fintech leadership includes founding Fintech Belgium and driving digital transformation at Degroof Petercam, bringing valuable industry perspective to lending technology challenges.