Arrangement Fee

How arrangement fee works

The fee may be fixed or percentage-based, paid upfront, deducted from the advance or added to the borrowing. The treatment affects net cash received, the balance owing and potentially the interest paid.

Practical UK business example

A company accepts a nominal £50,000 facility but receives less cash because an agreed setup fee is deducted. It plans using the net proceeds, not the headline amount.

Illustrative example only; not a finance quotation or a client case study.

Why it matters

Including arrangement fees gives a more realistic comparison of competing offers and the cash available for the stated purpose.

Limitations and common misconceptions

It is not necessarily the only cost. Broker, valuation, legal, documentation, monitoring and exit fees may be separate, and refund conditions should be checked.

Discuss business borrowing to discuss how the structure relates to your business.