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40 essential UK commercial finance terms defined in plain English — from Adverse Credit and Arrangement Fee through SWAP Rate and Whole-of-Market Broker. Each definition includes a practical context. Powered by money-pilot.co.uk — FCA regulated (FRN: 968705), 200+ lenders, zero broker fees.
By — Money Pilot | FCA Regulated Commercial Finance Broker (FRN: 968705)
This glossary covers the forty terms that appear most frequently in UK commercial finance — in conversations with lenders, in loan documents, and in broker recommendations. Every definition is in plain English, without jargon, with a practical context that explains why the term matters.
A borrower's credit history containing negative entries — County Court Judgements (CCJs), defaults, Individual Voluntary Arrangements (IVAs), late payment records, or previous bankruptcy. Not an automatic disqualification for UK commercial finance. Specialist bridging lenders and some commercial mortgage lenders assess adverse credit case-by-case, weighing asset strength and exit clarity more heavily than credit history.
A fee charged by the lender — not the broker — when a commercial finance facility is set up. Typically one to two percent of the loan amount. Distinct from any broker fee. When using a zero-fee broker such as Money Pilot, the arrangement fee is the lender's only setup cost to you.
Finance secured against a specific business asset — equipment, commercial vehicles, machinery — rather than property. The asset serves as collateral. Credit requirements are lighter than property-backed lending. Types: Hire Purchase, Finance Lease, Operating Lease, Sale and Leaseback.
Short-term secured finance — typically one to twenty-four months — used to bridge a funding gap, most commonly in property transactions. Priced monthly rather than annually. Repaid when the exit event occurs: property sale, mortgage completion, or development finance drawdown.
A bridging loan with a confirmed, dated repayment event — for example, a property sale where contracts have already been exchanged. Attracts better rates than an open bridge because the exit is confirmed and the repayment date is known.
Long-term secured lending (five to twenty-five years) against a property used for commercial purposes or investment. Assessment is based on loan-to-value ratio, property income relative to mortgage cost (DSCR), property type, and borrower strength.