When a company or individual borrows money, the lender will need
to take security for the funds they are lending to ensure they will
be repaid.
For real estate finance matters, the security
that the lender will take will depend on whether the borrower is a
company or an individual, the borrower's financial strength and
the loan's value.
The security is especially important if the borrower is a
'special purpose vehicle' (SPV)set up
specifically for that transaction and is borrowing money for development, as they
will have no financial history and its assets will usually be
limited to that one property.
Legal charge
Lenders will nearly always want to take security over the
property that the transaction relates to. This is often the
borrower's most valuable asset.
