The Lender Protection Ratio (Hard Security/Total Facility) is a key measure in UK property development finance that shows the proportion of a loan secured by tangible assets such as land or completed units compared to the total loan amount. This ratio helps property developers and lenders understand the level of hard security backing the finance. A higher ratio indicates stronger collateral, reducing lender risk and often leading to better interest rates and loan terms. It is essential for lenders when assessing risk and allocating funds across development projects in the UK property finance market.
This sits beneath Security & Ranking, introducing a more specific variant of the measure without changing its core interpretation. It is commonly considered alongside Equity Recourse Buffer, as both are closely related measures used to assess similar aspects of performance or risk. In funding terms, Lender Protection Ratio (Hard Security/Total Facility) is most commonly encountered in connection with Pre-Planning Land Loan within the property development capital stack.
View glossary entry