Parties
Debt adviser
A debt adviser runs a competitive process on the borrower's side of the table. The UK market is tiered by ticket size rather than by quality, and the tier that fits a £3-15m raise is not the one that fits £100m.
Also called debt advisory · debt advisor · corporate debt adviser · who should run my refinancing · debt advisory fees · debt adviser cost · success fee
The market is tiered by ticket size and complexity, not by quality. The question is fit, not rank.
| Tier | Natural range |
|---|---|
| Brokers and platforms | Under £1m |
| Lower-mid-market specialists | £3m to £15m |
| Independent boutiques | 18–45 on the scale |
| Big 4 and accounting firms | Mid-market |
| Investment banks | Above ~£75m |
Tier map from /guides/choosing-a-debt-adviser. Categories only; no firm is named. A trade-off map, not a ranking.
What the role involves
A debt adviser runs a financing process on the borrower's side of the table. In practice that means four things: working out what the business can and should borrow, preparing the pack lenders will underwrite from, running a competitive process across the lenders who fit, and negotiating the terms that result.
The last of those is where most of the value sits and it is the least visible from outside. Comparing offers on total cost rather than headline margin, arguing the definitions of debt and EBITDA, sizing covenant headroom against a downside case, fixing the amortisation profile to the cash cycle: none of it looks like much on a fee note, and all of it is worth multiples of the fee on a structured raise.
What an adviser does not do is lend, or hold a panel, or receive anything from the lender that wins. The economics are covered on the separate comparison with brokers.
How the UK market is tiered
By ticket size and complexity rather than by quality. This is the point most borrowers get wrong, and it is worth stating plainly: the tiers are built for different sizes of problem, and a firm being larger does not make it better for a smaller raise.
Investment banks and large independents work above roughly £75m. Big Four and accounting-firm teams occupy the mid-market. Independent boutiques sit beneath them. Lower-mid-market specialists work at £3m to £15m. Commercial finance brokers and platforms operate below about £1m.
The mismatch that costs borrowers most is retaining a firm whose economics need a larger deal. A £6m raise inside a practice built for £60m gets a junior team, a standard process and limited attention, not because anyone is careless but because the fee cannot support anything else.
The percentage falls as the deal grows. The work does not scale with the facility, and the fee reflects that.
| Facility | Success fee |
|---|---|
| £3m | 2% |
| £6m | 1.6% |
| £10m | 1.3% |
| £15m | 1.1% |
Illustrative application of the published convention that the success-fee percentage falls as the deal grows. Derived arithmetic on the 1-2% band at £3-15m.
The fee shape
A modest retainer that pays for the work, plus a success fee payable only when the financing completes, set as a percentage of the facilities raised.
At £3-15m that success fee is roughly 1 to 2% by market convention. The retainer is commonly credited in full against it at close, so a borrower who completes pays the success fee and the retainer is absorbed rather than added.
The retainer exists because the work is real and front-loaded whether or not a deal happens. An arrangement with no retainer at all sounds attractive and creates a pure completion incentive, which is the same alignment problem a lender-paid commission creates: the adviser is paid only if you borrow, which is precisely the moment you want them able to tell you not to.
Why the percentage falls with size
Because the work does not scale with the facility. Preparing a pack, running a process and negotiating a covenant package takes broadly the same effort on £6m as on £12m: the same number of lender conversations, the same diligence, the same documents.
So the percentage steps down as the deal grows. A £3m raise sits near the top of the 1 to 2% band, and a £15m raise sits near the bottom. That is a market convention rather than a rule, and it is a reasonable thing to raise directly in a fee conversation.
It also means a fee quoted as a flat percentage regardless of size is worth questioning at the larger end, and that comparing two firms on percentage alone without reference to deal size compares nothing useful.
When it is not worth retaining one
Often enough that any honest account has to say so.
Renewing an existing facility on substantially unchanged terms rarely justifies a fee: there is no competitive tension to create and little to negotiate. A small commoditised product, sub-£1m asset finance or an invoice line, is broker territory, where a panel and speed matter more than structure and a retainer would cost more than the process could save.
A straightforward refinancing at scale is marginal, and the honest test is whether a competitive process would produce enough tension to move the terms. If your incumbent is competitive and no alternative lender would bid, an adviser cannot manufacture leverage that does not exist.
Where it reliably earns the fee is an acquisition financing against a deadline, or a raise where the covenant package and definitions are heavily negotiated, because those are the situations where a small movement in terms is worth many times the cost.
An adviser is not always worth retaining. Where terms are selected rather than negotiated, the fee buys little.
| Situation | Worth retaining? |
|---|---|
| Renewal on unchanged terms | Rarely |
| Small commoditised product | Broker territory |
| Straightforward refinancing | It depends |
| Covenant-heavy refinancing | 60–85 on the scale |
| Acquisition financing | Usually |
Illustrative. The source guide is explicit that an adviser is not always the right answer.
What to ask any firm
Five questions, and the answers separate firms faster than any credential.
Which lenders will see this, and are any excluded for any reason. How many raises of this size and shape have you completed in the last two years, and can I speak to two of those clients. Who will do the work, as distinct from who is in this meeting. What is the fee, what is the retainer, is it credited, and what happens if nothing completes. And what would make you tell me not to borrow.
The last question is the most revealing. A firm that cannot describe a situation in which they would advise against a transaction is describing a sales process rather than an advisory one.
Arrangements to refuse
Three, and each of them is more common than it should be.
Any arrangement in which the adviser also receives something from the lender. That is not a debt advisory engagement whatever it is called, and it puts the adviser on both sides of a negotiation they are supposed to be running for you.
Exclusivity over your financing for an open-ended period, particularly where the engagement letter makes a fee payable on any facility you raise afterwards regardless of who found it. Time-limit it and scope it to the transaction.
And a fee calculated on the facility committed rather than the facility you need. That rewards a larger loan, which is not the same as a better outcome, and on a revolving line you may never draw it is a meaningful difference.
Where the value shows up
Not usually in the margin, which is the number borrowers watch. Twenty five basis points on £6m is £15,000 a year, real but modest.
It shows up in the arrangement fee, which is larger and moves more readily. In the covenant headroom, where the customary 25 to 30% against a downside case is the difference between ordinary volatility and a default. In the definitions of debt and EBITDA, which move the ratios without touching a headline number. In the amortisation profile, which decides how much cash the facility takes each year. And in the earnings bridge, where an evidenced add-back accepted at 3.0x leverage is worth three times its face value in capacity.
Any of those, on a structured raise at this size, can be worth more than the whole fee. None of them is visible in a rate comparison, which is why processes judged on the rate alone tend to be judged on the wrong thing.
Common questions
What does a debt adviser do?
Works out what the business can and should borrow, prepares the pack lenders underwrite from, runs a competitive process across the lenders who fit, and negotiates the resulting terms. The negotiation is where most of the value sits and is the least visible part: definitions, covenant headroom, amortisation profile and the all-in cost comparison.
How much do debt advisers charge?
A modest retainer that pays for the work plus a success fee payable only on completion, set as a percentage of facilities raised. At £3-15m that success fee is roughly 1 to 2% by market convention, and the retainer is commonly credited in full against it at close.
Why does the fee percentage fall on bigger deals?
Because the work does not scale with the facility. Preparing a pack, running a process and negotiating a covenant package takes broadly the same effort on £6m as on £12m. So a £3m raise sits near the top of the 1 to 2% band and a £15m raise near the bottom. A flat percentage regardless of size is worth questioning at the larger end.
How is the UK debt advisory market structured?
By ticket size and complexity rather than quality. Investment banks and large independents work above roughly £75m, Big Four and accounting-firm teams in the mid-market, independent boutiques beneath them, lower-mid-market specialists at £3m to £15m, and commercial finance brokers and platforms below about £1m.
Does a bigger firm mean a better outcome?
Not for a smaller raise. The tiers exist because they are built for different sizes of problem. A £6m raise inside a practice built for £60m tends to get a junior team and a standard process, not through carelessness but because the fee cannot support anything else.
When is a debt adviser not worth retaining?
Renewing an existing facility on unchanged terms, where there is no tension to create. A small commoditised product, which is broker territory. And a straightforward refinancing where your incumbent is already competitive and no alternative lender would bid, because an adviser cannot manufacture leverage that does not exist.
What should I ask before appointing one?
Which lenders will see this and whether any are excluded. How many raises of this size and shape they have completed in two years, with client references. Who will do the work as distinct from who is in the meeting. The full fee structure including what happens if nothing completes. And what would make them tell you not to borrow.
What arrangements should I refuse?
Any in which the adviser also receives something from the lender, which puts them on both sides of your negotiation. Open-ended exclusivity, especially where a fee is payable on any facility you later raise regardless of who found it. And a fee calculated on the facility committed rather than what you need, which rewards a larger loan rather than a better outcome.
The full treatment sits in the guide: choosing a debt adviser.
This page explains a term as it is used in the UK lower-mid-market. It is general information, not advice on any particular facility. Terms vary between lenders and between deals, and the drafting in your own agreement governs.