What is an arrangement fee?
An arrangement fee, also called a facility fee, a set-up fee or a completion fee, is the one-off charge a lender makes for putting a loan or facility in place. It is usually expressed as a percentage of the sum borrowed, sometimes as a flat amount, and it is either paid on completion or added to the loan and repaid with it, in which case interest is charged on the fee as well as on the money.
It is separate from the interest, separate from any fee a broker charges, and separate from the valuation and legal costs on a secured loan. A lender’s offer sets it out as a line of its own, and the useful question is always the same: what is the total cost over the life of the facility, in pounds, with every fee included.
How an arrangement fee is charged
Three ways, and the offer says which. Deducted from the advance, so the business receives the loan less the fee and repays the full amount. Paid separately on completion, so the business receives the whole loan and pays the fee from its own funds. Or added to the loan, so the business receives the whole loan and repays the loan plus the fee, with interest on both. The third is the one that costs most over a long term and shows least on the day, because nothing leaves the account.
The other fees that sit beside it
A commitment fee, charged on a facility for the part of the limit that is agreed but not drawn. A valuation fee on a secured loan, paid to the lender’s surveyor whether or not the loan completes. The lender’s legal fees, which the borrower usually pays on a secured facility, alongside its own solicitor’s. An exit fee, charged when the loan is repaid, common on bridging. An early repayment charge, charged if the loan is repaid before a date in the agreement. A renewal fee on a facility reviewed each year. Each lender publishes which of these apply to its products, and we set out what each provides so you can compare them.
A broker’s fee is a different thing
We will receive commission from lenders. On some cases we also charge a fee, which we set out in writing and agree with you before you proceed.
A broker’s fee, where one is charged, and the commission the lender pays the broker are disclosed to you before anything is agreed and are not the same as the lender’s arrangement fee. The lender’s fee is in the lender’s offer; the broker’s terms are in the broker’s own disclosure.
Questions to ask before signing
Is the fee deducted, paid or added, and if added, is interest charged on it. Is any part of it payable if the loan does not complete. What is the total of all fees over the term, in pounds. Does the early repayment clause refund any part of the fee. And on a secured loan, which of the valuation and legal costs are payable before the lender has issued a formal offer. The answers are in the offer or the lender’s tariff; where they are not, ask for them in writing.
We have access to a range of UK commercial finance lenders through our principal, White Rose Finance Group Limited. We work with UK limited companies and LLPs only, for business and commercial purposes. Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.
Frequently asked questions
Is an arrangement fee refundable?
Rarely once the loan has completed. Before completion, each lender’s terms say whether any part is payable if the borrower withdraws; a valuation fee already spent is not usually returned.
Is it better to pay the fee upfront or add it to the loan?
Adding it to the loan keeps cash in the business on the day and costs interest on the fee for the whole term; paying it upfront costs the fee once. Which a business does is its own decision, made on the total cost each lender provides.
Do all business loans have an arrangement fee?
No. Each lender publishes its own fee structure; some charge none and price the loan through the rate instead, some charge a fee and a lower rate. The comparison is the total cost over the term, not the fee alone.
Does enquiring affect my credit score?
Enquiring does not affect your credit score. If you apply to a lender, it runs its own credit search, which may be recorded on your file.
Is CapExpand regulated?
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. If you have a complaint, our complaints page explains how it is handled.
More funding questions answered
- What do lenders look for in a business loan application?The six things a lender reads before it decides: affordability, trading time, the credit files, the purpose, security or the guarantee, and the conduct of the bank account.
- What is a valuation report?The surveyor’s written opinion of a property’s value prepared for the lender under the RICS Red Book: what it contains, the bases of value, and why the figure decides the loan.
- What is a bridging loan?Short-term borrowing secured on property, repaid in one sum from a defined exit: the four things that define it, what it is for, and what it is not.
- What is asset finance?Borrowing to acquire or release value from equipment, vehicles or machinery where the asset is the security: hire purchase, leases and refinance, and what defines each.
- What is invoice finance?Borrowing against unpaid invoices: the advance, the balance on payment, factoring against discounting, recourse against non-recourse, and what defines it.
- What is a commercial loan?Lending to a business for business purposes, as distinct from consumer lending: what the term covers, the main kinds, and what a commercial loan agreement contains.
The whole cost, side by side
Tell us the amount and the purpose and we set out what each lender whose criteria the case meets charges, fee by fee, before anything is sent anywhere.
Sources
Checked 26 October 2026. This page explains how a fee is expressed; each lender publishes its own fees and nothing on this page is a quote.
CapExpand Ltd (FRN 1060885) is a credit broker and an Appointed Representative of White Rose Finance Group Limited (FRN 630772), which is directly authorised and regulated by the Financial Conduct Authority. We are a broker, not a lender. We work with UK limited companies and LLPs only, for business and commercial purposes. We do not provide financial advice.