Glossary definition
Facility Agreement
The legal contract between a borrower and a lender that sets out all terms and conditions of the loan including the facility amount, interest rate, drawdown mechanics, repayment terms, covenants, and events of default. The facility agreement is the primary loan document and is typically prepared by the lender's solicitors at the borrower's cost.
Definition
The legal contract between a borrower and a lender that sets out all terms and conditions of the loan including the facility amount, interest rate, drawdown mechanics, repayment terms, covenants, and events of default. The facility agreement is the primary loan document and is typically prepared by the lender's solicitors at the borrower's cost. Developers should have their own legal advisors review the facility agreement thoroughly before signing.
See also
Closely related terms.
Intercreditor Deed
A legal agreement between two or more lenders in the capital stack that defines their respective rights, priorities, and remedies in relation to the same borrower and security.
Arrangement Fee
A fee charged by the lender for setting up a loan facility, typically expressed as a percentage of the gross loan amount.
Drawdown
The staged release of loan funds during a development project, triggered by the completion of pre-agreed construction milestones.
Further reading
Guides that touch this term.
Guide
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
Development Finance Application Checklist: Documents You Need
A comprehensive checklist covering every document lenders require for a development finance application, from development appraisals to contractor tenders and planning evidence.
11 min read readReadGuide
Hidden Arrangement Fees in Development Finance: What Lenders Don't Tell You
Arrangement fees in development finance are rarely as straightforward as a single percentage. This guide exposes the hidden layers of fees that lenders charge and shows you how to negotiate effectively.
9 min read readRead
Where it shows up
Finance products using this term.
Service
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% LTVReadService
Mezzanine Finance
Stretch your capital stack beyond senior debt to reduce equity requirements.
From 12% p.a. · Up to 85-90% LTGDVRead
Ready to apply
Knowing the term is one thing.
Getting it on your term sheet is ours.
Send us the outline. We come back with indicative pricing from the right lenders inside a working day.