Glossary

Financing terms in plain language.

The vocabulary lenders use, explained the way we would explain it in a first meeting.

A–L

Key terms

Short-term capital that funds a gap until a defined event – a sale, a permit or a long-term refinancing.

A contractual condition in a loan agreement, for example a minimum debt service cover or a maximum loan-to-value.

Net operating income divided by debt service. Lenders typically require a buffer above 1.0.

Own funds that rank last in the capital stack and carry the first loss – and the upside.

An institutional buyer funds construction in instalments and acquires the asset on completion.

Debt as a percentage of total project cost. Junior capital pushes LTC from around 65% to up to 90%.

M–Z

Subordinated capital economically between debt and equity: ranked after the bank, ahead of the sponsor's equity.

Financing secured only on the asset and the project company, without personal recourse to the sponsor.

A priority return to an equity partner before profits are shared further.

First-ranking bank or fund debt, secured by a first-charge land charge.

Acquisition of the company holding the asset rather than the asset itself.

Senior and junior tranches combined in a single loan agreement with one lender.

Ask us – we will explain it in the context of your project.