S-curve assumption
New-build drawdown follows an S-curve: slow start, rapid mid-build draws, slow tail. Average outstanding balance is roughly 50 percent of peak debt over the build period. The workbench interest line uses this 50 percent approximation.
All-in fees
- Arrangement: 1 to 2 percent of facility on day-one drawdown.
- Monitoring surveyor: £1,500 to £3,500 per monthly visit.
- Exit / non-utilisation: 1 to 2 percent of facility at redemption.
- Broker fee (if used): 0.5 to 1 percent of facility, deducted at drawdown.
IRR vs flat rate
A 9.5 percent flat-rate quote on a 12-month facility is not the same as a 9.5 percent IRR. With arrangement and exit fees compressed into a short hold, IRR can run 12 to 15 percent. Always model the all-in IRR for lender selection.