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Our Glossary: Understanding terms.

A simple guide to the key terms and concepts you’ll come across as you navigate our products and services.

A B C D E F G I M N O P R S

A

  • Account Charge over Cash Deposit

    This is a Legal document. A cash deposit is held in an e-wallet account in the name of the Buyer, that is charged to all Investors, held by Nester Security Trustee. This means that the Buyer does not have access to the funds, without Nester’s consent.

  • Appropriateness Test

    A test which is required by the FCA to determine whether an Investor has the necessary experience and knowledge in order to understand the risks involved in relation to the product or service offered or demanded. On the Nester Platform this is called the ‘Self Assessment Test’.

  • Assignment of All Rental Income

    This is a Legal document. If the Buyer does not meet their Profit payment obligation, then Nester has the legal right to demand payment directly from the tenants of the property.

B

  • Buyer

    The terminology Nester uses for what is commonly known as a borrower.

C

  • Capital

    Wealth in the form of money or other assets owned by a person or organisation or available for a purpose such as starting a company or investing.

  • Completion Date

    The date the Opportunity completed.

  • Compliance

    A term used to ensure that a business adheres to external rules, regulations and internal controls.

  • Credit Committee

    Before providing financing for a transaction, a credit application must be approved by a number of individuals with varied skill sets and expertise within the industry.

  • Current Finance Amount

    The current outstanding Finance Amount to the Buyer.

D

  • Debenture

    This is a Legal document. Investors through Nester Security Trustee, have a floating charge over the Company’s assets. This means that if the Buyer defaults on their obligation(s), then Nester can crystalise the Charge and identify assets to take possession over.

  • Due Diligence

    An investigation, audit, or review performed to confirm facts or details of a matter under consideration. Due diligence is carried out on all deals and clients.

E

  • Ethical Finance

    Ethical and Islamic finance prohibits the use of financing to acquire properties which support businesses that are considered to have a negative social impact. This includes, but is not limited to, businesses that operate in the following areas: gambling, sale of alcohol, firearms, gaming, conventional banks and insurance companies.

  • Expected Profit

    The percentage profit expected to be earned annually by the Investor in an Opportunity. This is typically paid monthly and once received, will be credited to the Investors Nester e-wallet account.

F

  • FCA Regulated

    The Financial Conduct Authority (FCA) monitors firms and individuals to check they meet the required standards. Financial services providers must be authorised or registered by the FCA before they offer ‘regulated activities’. Banks, credit unions, and insurance companies are also regulated by the FCA and the Prudential Regulation Authority (PRA).

  • Finance

    To provide finance to a company to assist with the purchase, refurbishment or refinance of UK Real Estate.

  • Finance To Value

    The percentage of the Finance Amount against the value of the Property.

  • Fixed Legal Charge

    Is a form of security where, in the event of a default, Nester will have control over the asset (property), on behalf of all Investors. It is a legal document signed by the Buyer which is registered against the property at the Land Registry to alert any potential new buyer of the existence of the financing provided.

G

  • Guarantee

    A legal contract that promises repayment of a debt. Nester Opportunities typically include either a personal or corporate guarantee.

I

  • IF-ISA

    An Innovative Finance ISA (IF-ISA) is a type of tax-free individual savings account (ISA) that allows investors to earn tax-free returns on peer-to-peer (P2P) financing, crowdfunding investments, and other alternative finance products.

  • Illiquid Asset

    Assets which are not easily converted into cash.

  • Invest

    When an Investor puts money into an investment with the expectation of achieving a profit.

  • Investment Term

    Either the total Investment Term of the Financing or the Investment Term Remaining of the Opportunity.

  • Investor

    Any person or entity who commits capital with the expectation of receiving financial returns.

M

  • Maturity

    The expected date which an Opportunity comes to an end (either at the end of the term or earlier if the Buyer repays early).

  • Murabaha

    A form of contract, whereby one party purchases something (like a commodity) and sells it to another party for a higher, fixed price on a deferred term basis.

  • Murabaha Contract Value

    The value of a single Murabaha Contract.

  • Murabaha Profit

    Profit received from the purchase of a Murabaha Contract based on an expected Profit Rate.

N

  • Next Profit Rollover Date

    The date when your investment earnings are realised, your allocated funds become invested, or the funds you have put for sale on the Secondary market are sold, subject your contracts being purchased by another Investor.

  • Number of Nesters Invested

    The number of Investors that are currently invested in an Opportunity.

O

  • Original Finance Amount

    Total Finance amount provided to the Buyer to acquire, refinance or develop the property.

P

  • Peer to Peer (P2P)

    P2P financing websites connect buyers directly to investors. The site sets the rates and terms and enables the transactions.

  • Property Valuation

    A formal valuation is obtained by a RICS qualified valuer.

R

  • Redeemed

    When a Buyer has fully repaid their financing.

  • Rental Cover

    Properties that are funded that have income, for example Buy To Let properties, the Rental Cover reflects how many times the Rent is greater than the servicing cost of the financing provided.

  • Repayment Date

    The date on which the Finance Amount needs to be paid by the Buyer.

  • Return

    Profit received from an investment.

  • Ring Fence

    Guarantee that (funds allocated for a particular purpose) will not be spent on anything else.

S

  • Second Fixed Legal Charge

    A “second legal charge” in the context of a financing transaction typically refers to a charge over a property that is subordinate to another charge, typically referred to as a first fixed legal charge. If the property owner obtains additional financing charged on the same property, they are essentially providing a second legal charge on that property. The first financier has primary claim or first fixed charge on the property, and the second financier has a subordinate or secondary claim. In the event of a default or sale of the property, the first financier is entitled to be paid first from the proceeds, and any remaining funds would go to the second financier before any residual proceeds are returned to the owner of the property.

  • Secondary market

    The secondary market is where Investors can buy and sell Murabaha Contracts.

  • Security

    Legal documentation that protects the investments made by Investors in any given Opportunity. This always includes a First Fixed legal Charge on UK Real Estate assets for Nester Opportunities.

  • Shariah Compliant

    Refers to a financial product/service that complies with the principles of shariah, as approved by Nester’s Shariah Supervisory Committee.

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