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Definition
Retained interest is a structure, common on bridging finance, where the lender calculates the interest for the full term and deducts it from the loan at drawdown. You receive the gross loan minus the retained interest, and make no monthly payments. It removes affordability risk for the lender but shrinks your net advance.
In plain terms
You borrow, say, £100,000 but pocket less because the interest is taken off the top before you get the money.
Why it matters for your company
When comparing bridging quotes, look at the net advance and the gross loan — retained interest changes what actually lands in your account. See rolled-up interest and bridging loan interest explained.
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