Buzzwords, jargon and acronyms are rife in almost all industries. Understanding what they mean in the finance world is crucial when you are researching and making decisions. From Revolving Credit Facilities to Short Term Lenders, we make sense of some common finance jargon you’ll hear during your financial planning stages.

Revolving Credit Facility (RCF)

A revolving credit facility is a form of credit that allows a borrower to repeatedly 'withdraw' money, part or fully repay this money, and then withdraw again up to a pre agreed aggregate limit. This type of credit facility is an attractive option to borrowers who prioritise speed and flexibility when it comes to finance lines.

Short Term Lender

Lenders that offer a maximum of a three-year loan term are generally considered short term lenders. This is not to be confused with payday loan companies - lenders who provide very short-term loans that come with very high interest rates – encouraging the borrowers to pay back by ‘payday’.

Broker

Brokers have a wide knowledge of the industry in which they work in – for example property finance. Brokers act as a conduit between borrowers seeking finance, and lenders with an appetite to provide funding. The broker will ‘package’ the loan request for the borrower and attempt to source the best lender for the borrower’s requirement. The broker will charge both the lender and customer for their service.

Intermediary

An intermediary is very similar to a broker – they will source the lender for their client. The main difference is they only charge the lender for the introduction.

Panel

In finance terms, a Panel is a selection of professionals chosen by the lender, with whom they will encourage or insist their borrower uses. This panel may include brokers, valuers, solicitors, accountants, architects and more.

Asset Rich/Cash Poor

This usually applies to individuals who have high value assets, such as houses, cars, watches, and artwork but rarely possess high cash balances on a consistent basis. Therefore, they leverage their assets to either raise cash or act as collateral for a specific loan.

Private equity (PE)

In financial terms, Private Equity is investment funding, whereby the money provider will demand a share of the business in exchange for the cash. For example, a start-up company may request £200,000 to grow/progress the business, so the investor may take control of say 85% of the shares in the business as an acquisition to sell on after growth or until lending terms are met.

Joint venture (JV)

A Joint Venture can be seen as more of a partnership. The investor will usually be more hands on and involved with the operational side of the business/project. This is to ensure their investment is on track and likely to provide the desired return.

Onyx Property Finance are experts in providing financial solutions for property developers. We are dedicated to keeping on top of market trends and ensuring our customers are kept informed of any changes that might affect their borrowing, projects and investments – see our blog for all the latest insights.

Speak to an expert today and get up to 100% of your purchase and build costs with fixed interest rates for the lifetime of your loan: info@onyxmoney.co.uk