Glossary definition
Cross-Collateralisation
A lending arrangement where two or more properties are used as security for a single loan or group of loans, meaning the lender can enforce against any or all of the properties in the event of default. Cross-collateralisation is used by portfolio landlords and developers with multiple sites to increase overall leverage or to provide additional security where one site alone would be insufficient.
Definition
A lending arrangement where two or more properties are used as security for a single loan or group of loans, meaning the lender can enforce against any or all of the properties in the event of default. Cross-collateralisation is used by portfolio landlords and developers with multiple sites to increase overall leverage or to provide additional security where one site alone would be insufficient. The arrangement can complicate refinancing or individual property sales, as the lender's consent is required to release any asset from the cross-collateral pool.
See also
Closely related terms.
Security Package
The full suite of security taken by a lender to protect their position on a development loan, typically including a first legal charge over the property, a debenture over the borrowing company, personal guarantees from directors, and an assignment of key project contracts.
First Charge
A legal charge registered against a property title that gives the holder (typically the senior lender) first priority over all other creditors in the event of a sale or enforcement.
Personal Guarantee (PG)
A legally binding commitment from an individual, usually the developer or company director, to personally repay some or all of a loan if the borrowing entity defaults.
LTV (Loan to Value)
A lending ratio that expresses the loan amount as a percentage of the current market value of the property being used as security.
Further reading
Guides that touch this term.
Guide
The Capital Stack in Property Development: How to Structure Your Funding
A comprehensive guide to understanding and structuring the capital stack in UK property development, from senior debt through mezzanine to equity contributions.
9 min read readReadGuide
Legal Due Diligence in Development Finance: What Solicitors Check
Legal due diligence is the backbone of every development finance transaction. This guide explains what solicitors investigate, common issues that delay completions, and how to prepare your legal pack.
9 min read readReadGuide
Commercial Mortgages in the UK: A Complete Guide
Everything you need to know about commercial mortgages in the UK - from eligibility criteria and rental coverage ratios to how lenders value multi-let properties and what lease length matters.
4 min read readRead
Where it shows up
Finance products using this term.
Service
Commercial Mortgages
Long-term finance for commercial property acquisition and refinancing.
From 5.5% p.a. · Up to 75% LTVReadService
Development Finance
Senior debt funding for ground-up residential and commercial developments.
From 6.5% p.a. · Up to 65-70% LTGDVReadService
Bridging Loans
Short-term finance for acquisitions, auction purchases and time-sensitive deals.
From 0.55% p.m. · Up to 75% LTVRead
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