Security and guarantee coverage in property development finance UK refers to the extent to which a lender’s exposure is protected through collateral, guarantees, or both. It measures how much of the loan is secured against specific assets, such as land, buildings, or developer personal guarantees, reducing potential losses in case of default. High security coverage provides confidence to lenders and can influence loan terms, interest rates, and maximum funding. Developers use it to understand their obligations, optimise capital structuring, and manage risk across the property development project, ensuring financial stability and compliance with lender requirements.
This sits within Coverage & Cushion, reflecting a specific measurement approach that influences how performance, risk, or funding constraints are assessed. It is commonly considered alongside Exit & Realisation Buffers, as both are closely related measures used to assess similar aspects of performance or risk. In funding terms, Security & Guarantee Coverage is most commonly encountered in connection with Second Charge Revolving Facility within the property development capital stack.
View glossary entry