When Sarah Thompson's catering business faced its biggest crisis in fifteen years of trading, she had just 72 hours to raise £150,000 or risk her company collapsing. Her story illustrates how emergency bridging loans can be a lifeline when traditional finance simply isn't fast enough.
Thompson's Leeds-based catering company had built an excellent reputation serving corporate events and weddings across Yorkshire. With twenty-three employees and a modern commercial kitchen, the business was thriving until a perfect storm hit in early 2024.
A major corporate client, representing 40% of monthly revenue, suddenly went into administration owing Thompson £78,000. Simultaneously, her kitchen's industrial refrigeration system failed, necessitating an immediate replacement costing £45,000. With payroll due and supplier payments overdue, Thompson found herself facing a cash flow crisis that threatened to destroy everything she'd built.
"I had maybe three days before suppliers started refusing deliveries," Thompson recalls. "My staff needed paying, I had weddings booked for the weekend, and the bank was asking for paperwork I couldn't possibly provide in time."
Thompson first approached her business bank, where she'd banked for over a decade with an excellent track record. Despite her strong relationship and solid business fundamentals, the bank's lending process required a minimum of three weeks for approval of business loans.
The application required updated financial statements, cash flow projections, and a formal review of the business plan. Even with an accountant's help, gathering the required documentation would take days, and the underwriting process several weeks more.
"They were sympathetic but couldn't help with the timing," Thompson explains. "They kept saying 'if only you'd come to us earlier,' but nobody plans for their biggest client to go bust overnight."
Alternative funding options proved equally inadequate. Invoice financing companies wanted lengthy due diligence on her debtor book. Asset finance providers needed detailed equipment specifications and supplier quotations. Every option required time, and Thompson simply didn't have it.
A business mentor suggested exploring bridging loans, typically associated with property transactions. Thompson discovered that commercial bridging finance could be a viable option for urgent business funding when secured against property assets.
Thompson owned her commercial kitchen premises, which she had purchased five years earlier for £320,000 and was now worth approximately £380,000, according to recent valuations. This property equity became the key to unlocking emergency finance.
Unlike business loans, which focus on trading performance and cash flow projections, bridging lenders primarily assess the value of the security property and the borrower's exit strategy for repaying the loan.
Thompson contacted a specialist business bridging lender on Monday morning. The initial conversation took thirty minutes, covering her funding requirement, the security property, and her proposed exit strategy.
The lender required basic information: property ownership confirmation, recent valuation details, and a simple explanation of why she needed the funds and how she'd repay them. No complex business plans or detailed financial projections were demanded.
"It was refreshingly straightforward," Thompson remembers. "They focused on the property value and my repayment plan rather than dissecting every aspect of my business operations."
By Tuesday afternoon, the lender had instructed surveyors to value the property. Wednesday morning brought the formal loan offer: £150,000 at 1.2% monthly interest, secured as a first charge against her kitchen premises.
Funds were released Thursday morning, exactly 72 hours after Thompson's initial enquiry. She immediately paid the refrigeration supplier, cleared overdue accounts with trade creditors, and met Friday's payroll obligations.
The weekend's wedding events proceeded smoothly, thanks to the new refrigeration system being operational. Within days, Thompson had negotiated payment plans with remaining creditors and begun pursuing the debt from her failed client through insolvency proceedings.
"Having the cash flow breathing space changed everything," she explains. "Instead of firefighting daily crises, I could focus on running the business and recovering the situation properly."
Thompson's exit strategy involved refinancing with conventional business finance once her immediate crisis was resolved. With trading stabilised and cash flow restored, she could approach traditional lenders from a position of strength rather than desperation.
Three months later, she secured a business loan at conventional rates, repaying the bridging loan and significantly reducing her monthly finance costs. The bridging loan had served its purpose: providing rapid access to essential funding when time was critical.
Thompson's experience highlights several crucial points about emergency bridging finance:
Speed Matters: When businesses face genuine emergencies, the speed of funding often matters more than its cost. Three days of bridging loan interest was cheaper than losing the business entirely.
Asset-Based Security: Businesses with property assets have funding options beyond traditional revenue-based lending. Property equity can unlock finance when trading difficulties make conventional loans unavailable.
Professional Advice: Working with experienced bridging finance brokers can help identify solutions that business owners might not be aware of. Specialist knowledge saves crucial time in emergency situations.
Exit Planning: Even in emergencies, having a clear strategy for repaying bridging finance is essential. Lenders need confidence that borrowers can exit the facility within reasonable timeframes.
Emergency bridging loans are most effective for addressing temporary cash flow issues rather than fundamental business failures. They're ideal when:
Thompson's catering business now maintains better cash flow buffers and has established relationships with alternative finance providers. "I never want to be in that position again," she says, "but knowing emergency finance options exist gives me confidence to pursue growth opportunities."
Her story demonstrates that when disaster strikes, emergency bridging loans can provide the lifeline that saves businesses and livelihoods. The key is recognising when conventional finance won't work and acting quickly to secure alternative solutions.
Today, Thompson's business is stronger than ever, having learned valuable lessons about financial resilience whilst discovering that sometimes the most unconventional solutions prove most effective when time is running out.
Discuss business bridging loans with your advisor to explore how they can benefit your Company.