Flex Full Lending Terms

These full lending terms shall be incorporated into all outline lending terms issued by Flex and should be read in conjunction with all such outline terms expressed to incorporate these terms.

Borrower
This shall have the same meaning as set out next to “Borrower” in the relevant outline terms.

Ultimate beneficial owner(s) of the Borrower
This shall have the same meaning as set out next to “Ultimate beneficial owner(s)” in the relevant outline terms and each such stated ultimate beneficial owner shall be defined in these full terms as “UBO.”

Lender / Flex
Flex Financial Services Limited trading as “Flex.”

Property to be given as security
This shall have the same meaning as set out next to “Property” in the relevant outline terms.

Property value
This shall have the same meaning as set out next to “Property value” in the relevant outline terms, being the estimated 180-day vacant possession value excluding any new-build premium and subject to formal valuation (Valuation).

Gross loan to value %
This shall have the same meaning as set out next to “Gross loan-to-value %” in the relevant outline terms.

Gross Loan
The lower of:

  • the amount set out next to “Gross loan amount” in the relevant outline terms; or

  • an amount equal to the Gross loan to value % expressed as a percentage of the Property Value, less any first-ranking debt secured over the Property ahead of the Gross Loan, if any.

Loan
All amounts outstanding and owing from time to time by the Borrower to the Lender and secured against the Property.

Purpose
This shall have the same meaning as set out next to “Purpose” in the relevant outline terms.

Term
This shall have the same meaning as set out next to “Term (months)” in the relevant outline terms.

Interest rate (non-default)
The percentage set out next to “Monthly rate %” in the relevant outline terms and shall be expressed to be a monthly interest rate (calculated daily using a 365 day year).

Monthly interest £
The amount set out next to “Monthly rate £” in the relevant outline terms which is to be paid monthly throughout the Term from the Retained Interest until all the Retained Interest is fully utilised and then all interest to be serviced directly by the Borrower for any remaining Term thereafter (if any).

Number and amount of months’ interest retained
The number of months set out next to “Retained interest (months)” in the relevant outline terms is to be equal to the number of months’ retained interest for the Loan and shall equal the amount expressed in £/GBP set out next to “Total retained interest £” in the relevant outline terms (Retained Interest).

Number and amount of months’ interest serviced
The number of months set out next to “Serviced interest (months)” in the relevant outline terms.

Fees to be deducted upfront from the loan
Each of the amounts set out in the relevant outline terms opposite the following terms shall have the same meaning in these full terms: “Arrangement fee,” “Broker fee,” “Lender admin fee,” “Valuer fees inc VAT,” “Lender legal fees inc VAT,” and “Disbursements.”

Net advance to Borrower
Shall have the same meaning in these full terms as the amount set out next to “Borrower advance” in the relevant outline terms.

Exit fee
Shall have the same meaning in these full terms as the amount set out next to “Exit fee” in the relevant outline terms.

Redemption admin fee
Shall have the same meaning in these full terms as the amount set out next to “Redemption admin fee” in the relevant outline terms.

Borrower’s solicitor
Borrower to appoint its own solicitor and be responsible for their fees directly. Must be a minimum 3-partner firm and signatories must verify identity to their solicitor in person and sign wet ink documents in their solicitor’s presence. Independent legal advice to each guarantor is required and this can be from a solicitor at the same firm as the Borrower’s solicitors so long as they are separate to this transaction.

Payment of fees, disbursements and Borrower refunds
The relevant outline terms will set out how the valuation fee, Lender’s legal fee and disbursements are to be paid at the outset of the transaction, how much of these amounts is to be sent directly to the Lender by the Borrower (“Borrower Payment”) and how much (if anything) is to be refunded to the Borrower on completion of the Loan.

Unless the following is varied by agreement between the Borrower and Lender, any amounts set out in the relevant outline terms under the section headed “Amounts to be refunded to Borrower on loan completion” will be refunded in full to the Borrower on completion of the Loan.

Why do we take these amounts at the outset?
This allows us to move much faster than most lenders: as soon as these amounts are received, we immediately order property title documentation, searches and indemnity insurance. We also immediately instruct the Lender’s lawyers, saving the Borrower time and hassle. We find this can cut transaction times by as much as 3-4 weeks as we retain as much control as possible of the transaction in-house.

In the extremely rare scenario where the Loan does not complete – only due to either the Borrower withdrawing from the transaction or for reasons beyond the Lender’s control – the Lender shall apply all amounts received by it from the Borrower only towards the costs it has actually incurred in respect of Lender legal fees, valuer fees, VAT and disbursements (including searches and indemnity insurance).

Special conditions

  • These terms replace and rescind in their entirety any terms issued prior to the date of these terms.

  • Payment of any Borrower Payments by the Borrower to the Lender immediately following the acceptance of these terms.

  • Borrower’s solicitor’s confirmation they hold the full balance of funds to complete the Property purchase (if relevant).

  • Satisfactory evidence from the Borrower that an application is progressing for the refinance of the Property at any time after month 6 of the loan term (if relevant).

  • Terms are strictly subject to the satisfactory legal review of the transaction and successful KYC/AML and credit checks on the Borrower/Borrower UBOs.

Maximum number of drawdowns
The loan is to be drawn in the number of drawdowns set out in the relevant outline terms.

Financial covenants
The ratio of the Gross Loan to the Valuation shall be no more than the Gross loan-to-value % at any time during the Term.

Interest rate (default)
2.99% per month (calculated daily using a 365 day year).

Minimum interest payment
Regardless of when partial or full prepayment or repayment of the Loan occurs, such payment will be subject to an interest payment equivalent to at least 3 months’ interest (Minimum Interest Payment).

Interest Periods
Monthly in advance, payable on the same date in each month during the Term as the date of the loan agreement.

For the avoidance of doubt, this means that interest for the first month of the Loan term is paid on the date of the loan agreement as that represents payment for the first month’s interest in advance. Payment of interest for the second month of the Loan term would therefore be paid on the date falling one month after the date of the loan agreement as that represents payment for the second month’s interest in advance.

For example, if a loan had a 12-month term and interest was retained for the first 3 months, interest would be paid out of the 3 months’ retained interest on the date of the loan agreement, then on the date falling 1 month after that and then on the date falling 2 months after that. This would mean that the Borrower would then make their first direct interest payment on the date falling 3 months after the date of the loan agreement. This is because that would be the start of the fourth month of the Loan term and so this would represent payment in advance of interest for month 4 of the Loan term.

Repayment
All capital repayments will be rolled-up during the Term with a bullet repayment in full at the end of the Term. Interest will be retained and/or serviced in accordance with the terms of this term sheet.

Voluntary prepayment and cancellation
Prepayment in full or cancellation permitted with 5 business days' notice.
All voluntary prepayments are subject to the Minimum Interest Payment.

Mandatory prepayment

  • Illegality.

  • Change of control, flotation or sale of all or substantially all the assets of the Borrower.

  • Proceeds of disposals, subject to agreed carve-outs.

  • Proceeds of insurance, subject to agreed carve-outs.

Prepayments: general
Any amount of the loan prepaid may not be redrawn.
Prepayments are to be made with accrued interest and breakage costs, but otherwise without premium or penalty, other than the Minimum Interest Payment.

Application of prepayments of Loan
Prepayments will be applied against the outstanding capital balance of the Loan and interest payments will be adjusted accordingly.

Security

  • First-ranking legal charge over the Property where there is no permitted first-ranking debt from another lender to be secured over the Property at completion of the Loan.

  • Second-ranking legal charge over the Property where there is permitted first-ranking debt from another lender to be secured over the Property at completion of the Loan.

  • Personal guarantee from each UBO where the Borrower is a corporate entity.

Conditions precedent
In respect of the Gross Loan, standard conditions precedent for a transaction of this nature, in a form and substance satisfactory to the Lender, including but not limited to:

  • Execution of the loan agreement.

  • Execution of the legal charge over the Property.

  • If applicable, execution of a personal guarantee from each UBO and related independent legal advice confirmations.

  • Payment of the Borrower Payment.

  • Legal report on the Property supported by relevant searches/insurance where applicable.

  • A copy of the insurance policy for the Property or draft insurance policy to be put in place at completion.

  • A copy of the Valuation.

  • KYC documentation for the Borrower.

  • Copies of the last 6 months’ bank statements for the Borrower showing the Borrower’s total income and expenditure (including the income and expenditure for the Property if necessary).

  • Certified copy passport and proof of address from the last three months for the Borrower/ultimate beneficial owners.

  • A copy of any other document, authorisation, opinion or assurance specified by the Lender.

Representations and warranties
Standard representations and warranties for a transaction of this nature.

Covenants
Standard covenants for a transaction of this nature.

Information covenants
Standard information covenants for a transaction of this nature, including but not limited to such information as the Lender may reasonably request.

Events of default
Standard events of default for a transaction of this nature.

Taxes
All payments to be made by the Borrower must be made free of withholding and any other taxes.

Assignment and transfer by the Lender
The Lender may transfer or assign all or any part of its commitments at any time to another bank, financial institution or trust, fund or other entity that is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

Governing law
Laws of England and Wales.

Jurisdiction
Courts of England.

Other
All other terms and conditions standard for a transaction of this nature shall be included in the finance documents.

Expiry
The terms of this offer will be valid until the date falling 14 days after the date at the beginning of these terms.

Consent to checks and searches
By signing this form, the Borrower and each UBO consent to Flex Financial Services Limited obtaining personal and corporate credit checks, searches and anti-money laundering checks on each UBO and the Borrower through Experian, TransUnion, Veriphy, Equifax or an organisation of equivalent reputation and standing.