Typically used in Development Finance and Bridging Finance, where loans are worked backwards from Gross to Net. A lender will determine their maximum exposure or Gross Loan for the asset, normally expressed as a LTV percentage. The lender will then deduct their own costs; Arrangement Fees, Interest, Professional Fees, etc. The residual loan is known as the Net Loan. In the case of Development Finance, it is this residual Loan that is available to go towards the purchase costs of the Land. See Land Loan.
