Allica Bank Boosts AVM Bridging Finance Limits to 75% LTV and £2m

Allica Bank has significantly expanded its use of automated valuation models (AVM) for bridging finance, raising the maximum loan-to-value to 75% and more than doubling the maximum loan size for AVMs to £2 million. This move streamlines property finance for established businesses by removing the friction of physical valuations, offering brokers greater speed in a competitive lending market.

What was announced

The update to Allica Bank’s bridging proposition is designed to facilitate larger residential deals without the delays associated with physical property inspections. By increasing the maximum loan size for AVM eligibility from £750,000 to £2 million, the bank allows a broader range of transactions to bypass traditional asset management requirements. These changes apply to both residential purchases and refinances that meet specific criteria, with residential bridging rates starting from 0.69%.

In addition to the LTV and loan size increases, Allica is offering below-market-value purchases for up to 90% of the purchase price. To further accelerate the legal process, title indemnity insurance is available as a standard alternative to full legal work. The bank reports it is currently on track to deliver £250 million in bridging originations this year, following a period of sustained demand for its property finance products.

This expansion follows a series of updates introduced in June, which included a 0.03% rate reduction on loans exceeding £750,000 for select products and an enhanced refurbishment finance offering. To incentivise current applications, Allica has introduced a cashback incentive: eligible customers who submit applications before 30th September and complete by 31st October 2026 will receive 0.25% cashback on their loan balance. The AVM route is intended to provide brokers with a simpler path through the valuation process on eligible deals, potentially reducing costs for their clients.

"Speed and certainty are critical in bridging, especially for borrowers who need to move quickly when opportunity arises. Waiting for a physical valuation can add time they simply don’t have, which is why we’ve carried out extensive research comparing our AVM with physical valuations to understand where we can safely remove that step on eligible cases – saving valuable time for brokers and their customers."

Steve Palfreeman, Head of Sales – Bridging Finance at Allica Bank.

The companies involved

Allica Bank is a UK-based challenger bank specifically built to serve the needs of established small and medium-sized enterprises (SMEs). Unlike many fintechs that focus on micro-businesses or consumer banking, Allica targets the "missing middle"—businesses with 10 to 250 employees that are often underserved by high street banks. The institution provides a range of products including commercial mortgages, asset finance, and business savings accounts, alongside its specialized bridging finance division.

The bank has positioned itself as a technology-led lender that maintains a human touch through local relationship managers. This hybrid approach is intended to provide the efficiency of a digital-first platform with the nuanced underwriting required for complex business cases. Allica has rapidly scaled its operations since receiving its banking licence, focusing on the UK market while exploring broader opportunities. The company recently secured significant investment to fuel its growth, reinforcing its status as one of the most well-capitalised challengers in the business banking sector. Its focus on bridging finance reflects a broader strategy to capture market share in the property sector by addressing the specific pain points of speed and valuation accuracy for established business owners.

What FF News has reported before

FF News has closely followed Allica Bank’s trajectory as it scales its operations and product suite. In early 2026, the bank announced a major milestone with a Allica Bank Raises $155m Series D Round to Accelerate UK Growth and Tech Investment and Commence International Expansion. This capital injection was intended to bolster its technological infrastructure and support its entry into new markets.

The bank’s commitment to the SME sector was further evidenced when Allica Bank Scraps Arrangement Fees on Commercial Mortgages Over £750k to Fuel SME Growth, a move aimed at reducing the upfront cost of borrowing for larger enterprises. Additionally, the bank’s reputation among its core demographic was highlighted when Allica Bank Named Most Recommended Business Bank by Over 4,000 Businesses. More recently, the institution has signaled its intent to move beyond the UK, as seen when Allica Bank Targets European Expansion with Swedish Banking Licence Application.

What this means

The expansion of AVM limits to £2 million signals a maturing of automated valuation technology within the specialist lending sector. By pushing LTVs to 75% without requiring physical inspections, Allica is placing significant pressure on traditional lenders who still rely on manual appraisals for mid-market deals. This move suggests that the risk appetite for data-driven valuations is increasing, even for larger loan sizes. For the wider industry, the challenge will be matching this speed without compromising on credit quality. As bridging becomes increasingly commoditised, the ability to provide certainty within days rather than weeks is becoming the primary differentiator for challenger banks in the property market.