net advance
The cash a lender actually releases at drawdown, after arrangement fees and any interest retained up front.
A facility is not a cash sum. Where interest is retained, the lender deducts the whole term's interest at drawdown, so a £200,000 facility over twelve months at a retained rate releases materially less than £200,000 on the day.
The difference is the sponsor's problem, not the lender's. Deriving the cash position from the face value of the debt is the single most common modelling error in refurbishment finance, and it is always discovered at the worst moment.
Every figure downstream — the deposit needed, the works schedule, the contingency — depends on this number rather than on the headline.
Where this comes up
- Net advance: what a bridging facility really releases
A facility is not a cash sum. Where interest is retained it is deducted at drawdown, so the net advance is smaller than the headline. A capital stack…
- The refinance window: a date, not a status
A short-term facility must be refinanced or repaid on a date computed from completion and the term. Seasoned at six months, urgent ninety days out. What…
- Below market value is not the same as a discount
The headline discount ignores stamp duty, finance, works and selling costs. True discount counts every pound deployed, and it is almost always worse.