Glossary definition
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. The strength of the security package directly influences the terms a lender will offer, including the loan-to-value ratio and interest rate.
Definition
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. The strength of the security package directly influences the terms a lender will offer, including the loan-to-value ratio and interest rate. Weak security packages often result in higher pricing or reduced leverage.
See also
Closely related terms.
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.
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.
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.
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
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
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 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
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