Terms of Business

Angel Property Finance

Bridging Finance and Development Finance — Terms for Business Borrowers

Effective date: 19 July

Version 2.1

Important notice — please read before proceeding

1. About These Terms

These Terms of Business ("Terms") govern the relationship between Angel Property Finance Limited, a company incorporated in England and Wales under company number 13720740 whose registered office is at South, 1 Royal Crescent, Cheadle Royal Business Park, SK8 3FS ("APF", "we", "us" or "our"), and the person(s) or entity named as borrower in the relevant Facility Letter ("you", "your" or the "Borrower").

These Terms apply to every bridging loan facility, development finance facility or other secured commercial lending facility that APF agrees, or offers, to provide to you (each a "Facility"), together with the relevant Facility Letter, any Security Documents and any other document we tell you forms part of the agreement between us (together, the "Finance Documents").

By signing a Facility Letter, submitting a signed application, providing us with instructions in connection with a Facility, or drawing down any part of a Facility, you confirm that you have read, understood and accept these Terms. If any term of a Facility Letter conflicts with these Terms, the Facility Letter takes precedence in relation to that Facility.

We recommend you keep a copy of these Terms, your Facility Letter and all Security Documents for your records. A current copy of these Terms is available from us at any time on request.

2. Our Status and Regulatory Position

APF provides secured lending exclusively for business, commercial and investment purposes. We do not knowingly offer loans secured by a legal charge over a Borrower's, or a related person's, only or main residence in circumstances that would make the loan a "regulated mortgage contract" under article 61(3)(a) of the Financial Services and Markets Act 2000 (Regulated Activities) Order 2001, and we do not offer regulated credit agreements under the Consumer Credit Act 1974 (as amended).

Accordingly, APF is not required to be, and is not, authorised by the Financial Conduct Authority ("FCA") in respect of the Facilities described in these Terms, and the Facilities are not regulated by the FCA. This means that, save to the extent required by law, you will not have the right to refer a complaint about your Facility to the Financial Ombudsman Service, and you will not be able to claim against the Financial Services Compensation Scheme in connection with your Facility.

By entering into a Facility, you confirm and warrant to us that:

1. the Facility is required wholly or predominantly for business, investment or commercial purposes and not for your, or any related person's, personal, domestic or residential purposes;
2. any property offered as security is not, and will not become, your or a related person's only or main residence at any time during the term of the Facility, unless we have agreed otherwise with you in writing having confirmed that an applicable exemption applies; and
3. the information you have given us about the purpose of the Facility and the intended use of the security property is complete and accurate.

If, at any point, the purpose of your Facility or the status of the security property changes such that any of the above warranties would no longer be true, you must notify us immediately, as this may affect our ability to continue to provide the Facility on the agreed terms.

We strongly recommend that you take independent legal advice and independent financial and/or tax advice before entering into any Facility.

3. Definitions and Interpretation

"Business Day"

a day (other than a Saturday, Sunday or public holiday) on which banks are open for general business in London.

"Development"

where applicable, the construction, conversion, refurbishment or other development or building works to be financed in whole or part by a development Facility.

"Event of Default"

any of the events or circumstances described in clause 18 (Events of Default).

"Facility Letter"

the offer letter, loan agreement or facility agreement issued by APF to you setting out the specific commercial terms of a Facility, including the loan amount, interest rate, term, fees and any special conditions.

"Guarantor"

any person or entity who provides a guarantee, indemnity or other assurance in respect of your obligations under a Facility.

"Monitoring Surveyor"

an independent professional appointed by APF (at your cost) to monitor progress and costs of a Development financed under a development Facility.

"Redemption"

full repayment of all sums outstanding under a Facility, including principal, accrued interest, fees and any other amounts due.

"Security"

any legal charge, debenture, guarantee, assignment or other security interest granted in favour of APF to secure your obligations under a Facility, as described in the relevant Facility Letter.

"Security Documents"

the legal charge, debenture, guarantee(s) and any other documents creating or evidencing Security, in each case in a form acceptable to APF.

Headings in these Terms are for convenience only and do not affect interpretation. Words importing the singular include the plural and vice versa. A reference to "writing" or "written" includes email unless we tell you otherwise. A reference to a statute or statutory provision includes that statute or provision as amended, re-enacted or replaced from time to time.

4. Eligibility and Purpose of Lending

Facilities are made available to limited companies, limited liability partnerships, partnerships, trusts and individuals acting wholly or predominantly in the course of business, for business purposes including, without limitation, property investment, bridging finance pending sale or refinance, and the funding of development, conversion or refurbishment projects.

APF does not lend to consumers for personal, domestic or non-business purposes. Nothing in a Facility Letter issued under these Terms should be treated as an offer of consumer credit, and no application should be submitted on that basis.

We will carry out our own assessment of every application, including affordability, exit strategy, security value and background checks. We reserve the right, at our absolute discretion, to decline any application, to offer a Facility on different terms to those requested, or to withdraw an offer at any time before completion, in each case without any obligation to give reasons.

5. Our Services

APF arranges and provides short-term bridging finance and development finance secured against UK property, for business borrowers. Depending on the product, this may include:

• bridging finance to acquire, refinance or release equity from property pending a sale, refinance or other exit;
• development finance to fund the construction, conversion or refurbishment of property, released in stages against certified progress of works;
• related services such as arranging valuations, liaising with your legal representatives, and (where instructed) appointing a Monitoring Surveyor for development Facilities.

APF acts as principal lender (or, where stated in the Facility Letter, as arranger on behalf of a third-party funder) and does not provide investment, legal, tax or financial advice to you. Any commentary we provide about a Facility is information to help you understand its terms, not a personal recommendation.

6. Application Process

To apply for a Facility, you will need to complete our online application form and provide supporting information and documents, which will typically include (as applicable): proof of identity and address for all borrowers, directors, partners, members and beneficial owners; company or partnership constitutional documents; evidence of the security property and title; details of your proposed exit strategy; and, for development Facilities, a schedule of works, costings and any planning or building control documentation.

Any indication of terms, illustration or "decision in principle" we give you before completing our full underwriting and due diligence is not binding on APF and remains subject to satisfactory valuation, legal title, security, underwriting and completion of our conditions precedent. A binding offer is made only when we issue a signed Facility Letter.

You must ensure that all information and documents you provide to us, whether in the application or subsequently, are true, accurate and not misleading in any material respect, and you must tell us promptly if anything changes.

7. Due Diligence, Anti-Money Laundering and Sanctions

APF is required to carry out customer due diligence in accordance with the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) and related legislation. This will include verifying the identity of borrowers, directors, partners, members, beneficial owners and Guarantors, and may include obtaining evidence of source of funds and source of wealth.

We, or third-party providers on our behalf, may carry out credit reference, fraud prevention, politically exposed person and sanctions screening checks against you and any Guarantor, both before completion and on an ongoing basis during the life of a Facility. You consent to such checks being made and to relevant agencies retaining a record of that check.

We may decline to proceed with, or may suspend or terminate, a Facility at any time if we are unable to complete due diligence to our satisfaction, or if we reasonably suspect that a Facility is or may be connected with money laundering, terrorist financing, sanctions evasion or other financial crime. Where the law prevents us from telling you why we have taken any such action, we will not be able to give you an explanation.

8. Valuation

Before making a formal offer, we will normally require an independent valuation of the security property by a valuer instructed by, or acceptable to, APF, and the cost of that valuation (and any further valuations required during the term of the Facility) will be payable by you, whether or not the Facility completes.

Any valuation is obtained for APF's own lending purposes, to help us decide whether to lend and on what terms. It is not a structural survey, and you should not rely on it when deciding whether to enter into a Facility or how much to offer for a property. If you would like your own survey, you should instruct one separately, at your own cost.

9. Legal Representation and Costs

You must appoint your own solicitor, independent of APF, to act for you in connection with a Facility. APF will also instruct its own solicitors to act for APF.

You are responsible for, and must pay, APF's reasonable legal costs and disbursements in connection with the preparation, negotiation and completion of the Finance Documents, together with your own solicitor's fees. This applies whether or not the Facility ultimately completes, including where a Facility does not proceed to completion for any reason (for example, because you decide not to proceed, or because a condition precedent is not satisfied), in which case you must pay APF's abortive legal and other third-party costs incurred up to that point.

10. The Facility Letter and Conditions Precedent

If we are able to offer you a Facility, we will issue a Facility Letter setting out the specific terms, including the loan amount, interest rate, term, fees, Security to be granted and any special conditions. A Facility Letter is issued subject to contract and subject to satisfactory legal title, valuation, Security and completion of our conditions precedent, and is normally valid for acceptance for the period stated in it (or, if none is stated, [30] days from the date of issue), after which it may lapse or be subject to review.

Typical conditions precedent to drawdown include (as applicable): execution of all Finance Documents; a satisfactory valuation; satisfactory legal title and Security, validly perfected (including registration at Companies House and/or HM Land Registry where required); evidence of buildings insurance; and, for development Facilities, evidence of planning permission, building control sign-off arrangements and any required warranties or consents. Your Facility Letter will confirm the full list of conditions that apply to your Facility.

11. Fees and Charges

The fees applicable to your Facility will be set out in your Facility Letter. Depending on the product, these may include (all figures shown below are indicative only and must be confirmed, and where necessary amended, in the Facility Letter):

• Arrangement fee — up to 3% of the loan amount, payable on completion, normally deducted from the advance;
• Exit fee — 1 month's interest payable on redemption;
• Valuation fee, payable in advance to the appointed valuer;
• Our legal costs and disbursements, and your own solicitor's fees, as described in clause 9;
• Extension fee — 5% of the loan amount for each agreed extension of the term;
• Default rate/fee – 2x current months interest — see clause 18 (Events of Default);
• Redemption administration fee, payable when we prepare a redemption statement;
• Telegraphic transfer/drawdown administration fee for each release of funds;
• For development Facilities, Monitoring Surveyor fees for each site inspection and drawdown certification; and
• Introducer/broker fee (if applicable), which will be disclosed to you separately.

Unless your Facility Letter says otherwise, all fees are exclusive of VAT (which will be added where applicable) and are non-refundable once they have been incurred, deducted from the advance, or become due, even if the Facility is later repaid early or does not run for its full term.

12. Interest

Interest accrues on the amount drawn under your Facility at the rate set out in your Facility Letter, calculated on a period basis and is charged in full for each month / period from the date of each drawdown until repayment in full.

Depending on the product, interest may be payable monthly in arrears ("serviced"), or may be added to the loan balance and payable on redemption ("retained" or "rolled-up"), or a combination of both, as set out in your Facility Letter. Where interest is retained, it will itself accrue further interest in the manner described in your Facility Letter.

If any payment is not made by its due date, a default rate of interest of 2x the standard rate will apply to the overdue amount from the due date until payment is made in full, without prejudice to any other right or remedy available to APF, including under clause 18 (Events of Default).

13. Security

Your obligations under a Facility will be secured in the manner set out in your Facility Letter, which may include a first or subsequent legal charge over the security property, a debenture and/or fixed and floating charges over a corporate borrower's assets, an assignment of rental income, and/or personal or corporate guarantees from one or more Guarantors.

You must ensure that all Security is validly created, executed and perfected (including registration at HM Land Registry and/or Companies House, as applicable) as a condition of drawdown, and that it remains in full force and effect throughout the term of the Facility. You must not create, or agree to create, any further security interest over the security property or any other asset charged to APF without our prior written consent.

14. Drawdown

Funds will only be released once all applicable conditions precedent have been satisfied (or waived by APF in writing) and, for staged drawdowns under a development Facility, once the Monitoring Surveyor has certified that the relevant stage of works has been completed to the required standard and within budget.

APF is not obliged to release any part of a Facility if, in our reasonable opinion, there has been a material adverse change in your financial position, the value of the security property, or your ability to complete the Development (where applicable), or if an Event of Default has occurred or would occur as a result of the drawdown.

15. Development Finance — Additional Terms

Where your Facility is a development Facility, the following additional terms apply unless your Facility Letter says otherwise. You must carry out the Development diligently, in accordance with the approved plans, planning permission and building regulations, using appropriately qualified and insured contractors, and must keep us informed of material progress, delays, and any cost overruns.

We may appoint a Monitoring Surveyor, at your cost, to review progress, costs and drawdown requests. Staged drawdowns will be released in arrears against certified completed works, less any agreed retention. You must promptly notify us of any material change to the Development, its costs, programme or specification, and of any dispute with a contractor or professional team member that could affect completion.

16. Repayment and Redemption

Your Facility is repayable in full on or before the expiry of the term stated in your Facility Letter, whether by sale of the security property, refinance, or from other funds available to you. You should plan your exit strategy in good time, as we are not obliged to extend or refinance a Facility.

Before redeeming your Facility, you or your solicitor must request a redemption statement from us. We will use reasonable endeavours to provide this within [5] Business Days of a valid request. The redemption figure will include all outstanding principal, accrued (and retained) interest, unpaid fees and any other amounts due under the Finance Documents up to the anticipated date of redemption.

17. Early Repayment

You may repay your Facility in full before the end of its term, subject to any minimum interest period or early repayment charge stated in your Facility Letter. Unless your Facility Letter states otherwise, a minimum of [1] month's interest is payable even if you repay earlier. Partial early repayments are only permitted where your Facility Letter expressly allows this.

18. Events of Default

Each of the following is an Event of Default:

1. you fail to pay any sum due under a Facility on its due date;
2. you breach any other term of the Finance Documents and, where capable of remedy, do not remedy that breach within any period specified by APF;
3. any representation or warranty made by you or a Guarantor is or becomes untrue or misleading in any material respect;
4. you, or any Guarantor, become insolvent, enter into or propose any composition or arrangement with creditors, or have an administrator, receiver or liquidator appointed;
5. you dispose of, or create further security over, the security property or other charged assets without our consent;
6. in our reasonable opinion, the value of the security property has materially reduced, or works on a Development have stopped, are materially delayed, or are proceeding other than in accordance with the approved plans; or
7. there is a change of control of a corporate Borrower, or any other event which we reasonably consider materially and adversely affects your ability to perform your obligations, without our prior consent.

If an Event of Default occurs and is continuing, we may (without prejudice to any other right or remedy) do any or all of the following: demand immediate repayment of all sums outstanding; apply default interest and/or a default fee as set out in your Facility Letter; enforce any Security, including by appointing a receiver (including under the Law of Property Act 1925), taking possession of, or selling, the security property; and recover from you all reasonable costs incurred in enforcing our rights.

19. Your Representations, Warranties and Undertakings

You represent, warrant and undertake to us, on a continuing basis throughout the term of the Facility, that: you have full power and authority to enter into and perform the Finance Documents; all information you have provided is, and will remain, accurate and not misleading; there is no undisclosed litigation, dispute or insolvency event affecting you or any Guarantor; you will maintain adequate insurance over the security property; you will comply with all applicable laws, planning permissions and building regulations; and you will promptly notify us of any material change in your circumstances, and will provide such financial and other information as we may reasonably request, and permit us (or our representatives, including any Monitoring Surveyor) to inspect the security property on reasonable notice.

20. Guarantees and Third-Party Security

Where a Facility Letter requires a guarantee, indemnity or other Security from a third party, that person must be separately advised that we strongly recommend they take independent legal advice before signing, and must sign the relevant Security Document (and, where required, a certificate confirming they have received or been offered such advice) before drawdown. The specific terms of any guarantee will be set out in the relevant Security Document.

21. Insurance

You must effect and maintain adequate buildings insurance (and, where works are ongoing, contractors' "all risks" insurance) over the security property throughout the term of the Facility, noting APF's interest as chargeholder, and must provide evidence of such insurance to us on request. If you fail to do so, we may (but are not obliged to) arrange insurance ourselves and recover the cost from you.

22. Communications and Notices

We will normally communicate with you by email, using the address you provide to us, and by post to your last known address. A notice sent by email is treated as received on the day it is sent (or, if sent outside normal business hours, on the next Business Day), and a notice sent by first-class post is treated as received two Business Days after posting. You must tell us promptly if your contact details change.

23. Data Protection and Confidentiality

APF will process personal data about you (and, where relevant, your directors, partners, members, beneficial owners and Guarantors) in accordance with the UK GDPR, the Data Protection Act 2018 and our privacy notice, a copy of which is available on request. This may include using data to assess your application, to carry out the due diligence and monitoring described in clause 7, to administer your Facility, and to share information with credit reference agencies, fraud prevention agencies, valuers, solicitors, Monitoring Surveyors, insurers, regulators, and any actual or prospective assignee or funder of APF, as reasonably necessary to provide the Facility.

Each party will keep confidential the terms of the Finance Documents and any other confidential information obtained from the other in connection with a Facility, except where disclosure is required by law or regulation, to professional advisers on a confidential basis, or as otherwise permitted under these Terms.

24. Conflicts of Interest

APF maintains arrangements designed to identify and manage conflicts of interest fairly. Where APF receives a fee or commission from a third party (for example, an introducer) in connection with your Facility, this will be disclosed to you. If you have any concerns about a potential conflict of interest, please raise this with us before proceeding.

25. Complaints

If you are unhappy with any aspect of our service, please contact us at [email protected] and we will investigate your complaint under our internal complaints procedure. We aim to acknowledge complaints within 5 Business Days and to provide a full response within 8 weeks.

As described in clause 2, the Facilities described in these Terms are not regulated by the FCA, and complaints about them are not eligible for referral to the Financial Ombudsman Service. If you remain dissatisfied after exhausting our internal process, you may wish to seek independent legal advice about your options, which may include referring the matter to court.

26. Limitation of Liability

Nothing in these Terms limits or excludes our liability for fraud or fraudulent misrepresentation, for death or personal injury caused by our negligence, or for any other liability which cannot lawfully be limited or excluded.

Subject to the above, our liability to you in connection with a Facility is limited to direct losses reasonably foreseeable as arising from our breach, and we will not be liable for any indirect or consequential loss, or for loss of profit, business or goodwill. We are not responsible for the acts, omissions, advice or delay of any third party, including valuers, solicitors, contractors, Monitoring Surveyors, HM Land Registry or Companies House, save where we have failed to take reasonable care in selecting them.

27. Force Majeure

Neither party will be liable for any delay or failure to perform its obligations (other than a payment obligation) caused by circumstances beyond its reasonable control, including acts of God, war, civil unrest, industrial action, failure of a utility or telecommunications provider, or the acts or omissions of a government or regulatory authority.

28. Assignment

APF may assign, transfer, sub-participate or grant security over its rights and obligations under the Finance Documents, including to a funder, co-lender or securitisation vehicle, without your consent, provided this does not increase your obligations. You may not assign, transfer or charge any of your rights or obligations under the Finance Documents without our prior written consent.

29. Third-Party Rights

Save for any permitted assignee of APF, a person who is not a party to the Finance Documents has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce, or to enjoy the benefit of, any term of the Finance Documents.

30. Amendments and Waiver

We may update these Terms from time to time; the current version will be available from us on request. Any variation to a specific Facility must be agreed in writing and signed by both parties. No failure or delay by APF in exercising any right under the Finance Documents will operate as a waiver of that right, and any waiver will only be effective if given in writing and will apply only to the specific instance for which it is given.

31. Entire Agreement

The Finance Documents constitute the entire agreement between you and APF in relation to a Facility, and supersede all prior discussions, understandings and representations relating to that Facility. Each party confirms that it has not relied on any statement not set out in the Finance Documents, save in respect of any liability arising from fraud or fraudulent misrepresentation.

32. Severability

If any provision of these Terms is found by a court or other competent authority to be invalid, illegal or unenforceable, that provision will be treated as deleted, and the remaining provisions will continue in full force and effect.

33. Governing Law and Jurisdiction

These Terms, and any Facility Letter and Security Document (unless expressly stated otherwise), are governed by the law of England and Wales, and the parties submit to the exclusive jurisdiction of the courts of England and Wales.