FCAAuthorised & Regulated · No. 943426 · Lending in the United Kingdom and internationally since 2016
Home / Resources / Glossary
Resources

Lending, in plain English.

Banking jargon hides as much as it reveals. We've defined the terms that matter — without the legal padding. If a term is missing, our team will add it.

A · B · C · D · E · F · G · H · I · K · L · M · O · P · R · S · T · U · V · W

A

APR
Annual Percentage Rate. The annual cost of a loan expressed as a percentage of the principal. ASAF's flat 1.5% APR means you pay 1.5% of the original loan amount each year, fixed for the term.
Affordability assessment
A regulatory requirement under FCA rules. We review your income, regular outgoings, and existing debt commitments to ensure the proposed repayments are sustainable for you.
Asset finance
A type of business loan secured against (or used to acquire) a specific business asset — typically equipment, machinery, or vehicles. The asset itself usually serves as security.

B

Borrower
The person or entity to whom the loan is issued. Borrowers are responsible for repayment in accordance with the loan agreement.
Bridging loan
A short-term loan, typically used to bridge a gap between two transactions — for example, buying a new property before the existing one has sold. Not currently offered by ASAF.

C

Capital
The principal amount of a loan, before any interest. For a £100,000 loan, the capital is £100,000.
Collateral
An asset pledged as security against a loan. If the borrower defaults, the lender has a legal claim over the collateral. ASAF offers both secured and unsecured products.

D

Default
A failure to meet the terms of a loan agreement, usually by missing scheduled payments. Defaults are reported to credit reference agencies and may affect future borrowing.

E

ESG
Environmental, Social, and Governance — a framework for assessing a borrower's or company's sustainability and ethical impact. ASAF screens all lending against ESG criteria.
Eligibility
The criteria a potential borrower must meet to be considered for a loan, including age, residency, income, and creditworthiness. Eligibility checks are typically done with a soft search.
Equity
The portion of an asset's value that is owned outright (i.e. unencumbered by debt). For property, equity = market value − outstanding mortgage.

F

FCA
Financial Conduct Authority — the UK regulator for financial services firms. ASAF Lending is FCA-authorised under registration number 943426.
Fixed rate
An interest rate that does not change during the loan term. ASAF's flat 1.5% APR is fixed — your repayment amount cannot rise.
Flat rate
A method of calculating interest where the rate is applied to the original principal each year, regardless of how much has been repaid. ASAF's flat 1.5% APR is published transparently.

G

Green loan
A loan where the proceeds are used to fund projects with environmental benefits — renewable energy, retrofits, sustainable agriculture, clean transport. ASAF green loans are decisioned within 48 hours.

H

Hard search / Hard credit check
A formal credit search recorded on the borrower's credit file. Visible to other lenders, and may temporarily affect a credit score. ASAF only performs hard searches at the formal offer stage, with consent.

I

Interest
The cost of borrowing money, expressed as a percentage of the principal. ASAF's interest is charged at a flat 1.5% APR.
Invoice finance
A facility where a business borrows against unpaid customer invoices. Helps smooth cash flow when customers pay on long credit terms.

K

KYC
Know Your Customer. Regulatory checks on identity, address, and source of funds, required of all financial institutions to prevent fraud and money laundering.

L

Loan-to-value (LTV)
For property-secured loans, the loan amount expressed as a percentage of the property's market value. Lower LTV usually means lower lender risk.

M

Maturity
The end date of a loan, when the final payment falls due.

O

Origination
The process of creating a new loan — application, underwriting, approval, and disbursement.
Overpayment
Paying more than the scheduled instalment, reducing the outstanding balance and total interest. ASAF allows unlimited overpayments without penalty.

P

Personal guarantee
A commitment from an individual (e.g. a company director) to be personally liable for a business loan if the company defaults.
Principal
See Capital — the amount borrowed, before interest.

R

Refinance
Replacing one loan with another, typically to obtain a better rate, longer term, or release equity. ASAF accepts refinance applications from existing borrowers and from customers of other lenders.
Relationship manager
A named member of the ASAF team assigned to your file. The same person reviews your application, answers your questions, and remains your point of contact for the life of the loan.

S

Secured loan
A loan backed by a specific asset (collateral). The lender has a legal claim against the asset in the event of default. Often available at lower rates due to reduced lender risk.
Soft search / Soft credit check
A non-recorded credit lookup that does not affect the borrower's score. Used by ASAF at the application and quote stages, never the offer stage.

T

Term
The period over which a loan is repaid. ASAF terms range from 1 to 25 years depending on loan type.

U

Underwriter
The professional who assesses a loan application against the lender's risk and affordability criteria. ASAF underwriters are real people, not algorithms.
Unsecured loan
A loan not backed by collateral. Approval relies on the borrower's creditworthiness and affordability.

V

Variable rate
An interest rate that can change during the loan term, typically tied to a reference rate. ASAF does not offer variable-rate products — all loans are at our fixed 1.5% APR.

W

Working capital
The funds a business needs to cover day-to-day operations — payroll, stock, supplier payments. Working capital loans bridge gaps between income and outgoings.

A term we missed? Tell us.

Our glossary grows with reader questions. If a term you've encountered isn't here, drop us a line and we'll add a definition.

Suggest a term →