The facility letter is where the deal you negotiated meets the deal you're actually getting. Most borrowers read the rate, the fee and the term, sign, and discover the rest of the document the first time something goes wrong — which is precisely when its clauses are designed to bite. Read it all. Here is how a professional does, clause family by clause family.
The money clauses beyond the headline
Default interest first, always. Find the rate that applies after the term expires or on breach — typically a substantial step up from the contract rate — and check two things: whether it compounds, and whether it applies to the whole balance or the arrears. Some letters apply default rates retrospectively to the entire loan from day one on certain breaches. That single sentence can be worth more than every basis point you negotiated on the headline.
Minimum interest next: many lenders earn no less than three months' interest even if you redeem in week six, and some pair it with an early repayment charge dressed in different clothes. If your plan involves a fast exit, this clause is your true price. Then the fee tail — exit fees (mostly extinct, but check), admin and redemption fees, and on works facilities, whether interest is charged on the full facility or only drawn funds, and whether a non-utilisation fee applies to the undrawn portion. Two loans with identical headline rates can differ by five figures through these lines alone.
The control clauses
Events of default are the lender's list of tripwires: non-payment, breach of covenant, insolvency events, misrepresentation — all standard — and sometimes broader catches like material adverse change, which give the lender discretion you should at least understand. Cross-default clauses tie this loan to your other borrowing: a problem elsewhere becomes a problem here. Check what requires consent — further charges, tenancies, works beyond the agreed scope, even planning applications — because doing any of them without asking is itself a default.
Extension provisions deserve special attention because you might need them. Some letters are silent, leaving extensions entirely to goodwill; better ones name the mechanism and the fee. Silent is not neutral — negotiate the sentence in while everyone still likes each other.
Conditions precedent — the quiet timeline killer
The CP list is everything that must be true before money moves: title requirements, searches or indemnities, insurance naming the lender, planning documents, ID and source of funds, sometimes personal guarantees with independent legal advice certificates. None of it is negotiable in substance, but all of it is schedulable — the difference between a two-week completion and a five-week one is usually whether the CP list was attacked on day one or discovered in week three. Ask for it early, assign every line an owner, and chase daily.
A worked example of why this matters
Take a real pattern we've unpicked more than once. A borrower redeems in month four of a twelve-month bridge — good news, surely. The letter carried three months' minimum interest, which they'd absorbed, but also a redemption administration fee, and interest charged to the end of the calendar month rather than the day of redemption. Total cost of the "early win": several thousand pounds nobody had priced. None of it was hidden. All of it was in the letter. The same reading failure runs the other way with more teeth: a borrower two weeks past term, exit exchanged and completing imminently, discovers the default rate applies to the whole balance and compounds — and that the extension clause they assumed existed doesn't. Their negotiating position at that moment is zero. Both stories end the same way: the letter was the deal, and the headline was just the advertisement for it.
When to negotiate, and with what
Your leverage peaks before you pay the commitment fee and instruct valuation, and falls to roughly zero at completion week. So the letter gets lawyer's eyes at issue, not at signing. What's realistically movable: default-rate scope, minimum-interest period, extension mechanics, specific consent carve-outs for your known plans. What isn't: the security package, the CP substance, the events-of-default skeleton. As of July 2026 the competitive end of the market will genuinely trade on these clauses when asked directly — lenders reserve their flexibility for borrowers who read the document.
Read the letter asking one question: what happens in the bad month? The good-month clauses — rate, fee, term — were never going to hurt you. Every expensive surprise we've unpicked for a client lived in a clause they'd have queried in five minutes if they'd read it through that lens.