There is a lot of information that could be included – or missing – from your document. You can get Indicative Terms that mean little more than a lender saying ‘we might be willing to lend this much in theory’.īut you can also get committed terms where the loan has already been underwritten or is simply subject to valuation and legals.Īs you can imagine, this makes a huge difference, so it’s really important you know what exactly is being offered, and how much underwriting, if any, has already been done. In an unregulated market that’s unfortunately not the case. I believe the contents should also be consistent across the sector, a bit like an ESIS for a mortgage which shows the key features and risks of the mortgage contract for a customer. In an ideal world, every Indicative Terms document sent out by bridging lenders would be clear, fair and transparent, as well as comprehensive and easy to understand. If you don’t, you need to ask the lender.

That’s why the borrower (or the broker acting on their behalf) needs to satisfy themselves that they understand every aspect of these Indicative Terms. This can also be known as an Initial Offer, Agreement In Principle or Decision In Principle.Īnd, just as there’s no consistency in its name, there’s very little in its contents either.

There’s no consistent definition of Indicative Terms in bridging, so it’s your responsibility to ask exactly what’s being offered, says Scott Marshall, founder of Roma FinanceĪt an early stage of the bridging loan process, you or your broker will receive ‘Indicative Terms’ from the lender.

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