Commercial Finance rate drops

by | Jan 17, 2024 | Products

Commercial Finance products:

Key lending criteria:

  • Borrower type; UK registered Limited Companies, LLPs, Partnerships and Sole Traders
  • Loan size; £150,000 to £10 million
  • Term; 5 to 25 years. Interest only products maximum 5 years
  • Base Rate type; Variable – Bank of England Base Rate (subject to a minimum Base Rate of 1.5%). Fixed – reverts to a margin above Bank of England Base Rate equal to the fixed rate less 1.5%, subject to a Base Rate floor of 1.5%
  • Security; First charge over Freehold & Long Leasehold Property in England, Scotland & Wales. Debentures and guarantees on a case by case basis

 

Commercial Investment

 

Commercial investment up to £2m

LTV up to 60%

5-year fixed 8.25%

Variable (margin over Base Rate) 4.80%

 

Commercial investment over £2m

LTV up to 65%

5-year fixed 8.00%

Variable (margin over Base Rate) 4.50%

 

Semi-commercial, 50-80% residential

LTV Up to 60% | 5-year fixed 6.20% | Variable (margin over Base Rate) 2.25%

LTV Up to 70% | 5-year fixed 3.90% | Variable (margin over Base Rate) 3.00%

LTV over 70% | 5-year fixed 7.10% | Variable (margin over Base Rate) 3.50%

Semi-commercial apportionment is defined by percentage of floor space across a semi-commercial property or portfolio (confirmed at valuation). The residential element must not exceed 80%, and must be capable of being let on a separate assured shorthold tenancy. The commercial element must be not less than 20%. Properties less than 50% residential will be classed as commercial from a product perspective.

 

Commercial investment up to £2m

LTV Up to 70% | 5-year fixed 8.25% | Variable (margin over Base Rate) 4.80%

LTV over 70% | 5-year fixed 8.40% | Variable (margin over Base Rate) 4.95%

Commercial investment mortgages, backed by the Recovery Loan Scheme guarantee, are available on a 5-year interest-only term.

 

 

Owner-occupied

 

Commercial

LTV Up to 60% | 5-year fixed 7.15% | Variable (margin over Base Rate) 3.10%

LTV Up to 70% | 5-year fixed 7.50% | Variable (margin over Base Rate) 3.45%

LTV over 70% | 5-year fixed 7.85% | Variable (margin over Base Rate) 3.80%

 

Semi-commercial

LTV Up to 60% | 5-year fixed 6.10% | Variable (margin over Base Rate) 2.00%

LTV Up to 70% | 5-year fixed6.45% | Variable (margin over Base Rate) 2.35%

LTV over 70% | 5-year fixed 6.80% | Variable (margin over Base Rate) 2.70%

 

 

Interest-only, Owner-occupied

 

Pricing

LTV Up to 70% | 5-year fixed 7.30%

LTV over 70% | 5-year fixed 7.40%

Product Terms

Borrower type: UK registered Limited Companies, LLPs, Partnerships and Sole Traders. Owner occupiers only

Loan size: £150,000 to £2,000,000

Term: 5 years

Rate type: Fixed

Security: First charge over Freehold & Long Leasehold Property in England, Scotland & Wale, Debentures – case by case, Guarantees – case by case

 

 

Owner-occupied hotels

 

Up to £1.5m

Debt service cover   |    LTV – VP   |   LTV – MV

130%-200% debt service cover   |   70%   |   65%

200% debt service cover   |   80%   |   65%

 

Over £1.5m

Debt service cover   |    LTV – VP   |   LTV – MV

130%-200% debt service cover   |   70%   |   65%

200% debt service cover   |   80%   |   65%

 

Pricing

Loan to VP value   |   Up to 60%   |   Up to 70%   |   Up to 80%   |   Up to 90%   |   Up to 100%

Fixed rate   |   7.15%   |   7.50%   |   7.85%   |   8.10%   |   8.35%

Variable margin   |   3.10%   |   3.45%   |   3.80%   |   4.05%   |   4.30%

Product criteria

  • A dedicated relationship manager will be assigned to all customers where the loan exceeds £1.5m and the LTV exceeds 70% of VP value
  • Management accounts to be provided on a quarterly basis for loans over £1.5m
  • Loan over 80% of VP value and must be fully amortising from day 1
  • Personal guarantee to be given for any amount in excess of 70% of VP value

 

Healthcare – care homes

 

Experienced operators (a minimum of two years as care home owner-operator)

  • Loan size for experienced operators: £500,000 to £10m (subject to a maximum of 5.0x EBITDA)
  • Loan-to-value for experienced operators: up to 70% MV and 100% MV2, whichever is lower
  • Margins are above Bank of England Base Rate (subject to a minimum Base Rate of 1.5%)
  • Interest Rate Margins are subject to status and due diligence
  • Extending above 90% MV2: considered subject to borrower profile, valuation and DSCR
  • For care home transactions, please speak with your BDM/ SRM for full details on required information

Products

Up to 70% MV/ 90% MV2   |   Rate 3.00%   |   25 years (20 years for non-purpose built)

Up to 70% MV/ 100% MV2   |   Rate 3.50%   |   15 years

 

First-time buyers/ new entrants (operator with less than two years experience/first-time buyer)

  • Loan size for first-time buyers/ new entrants: £500,000 to £5m (subject to a maximum of 5.0x EBITDA)
  • Loan-to-value for first-time buyers/ new entrants: up to 70% MV and 100% MV3, whichever is lower
  • Margins are above Bank of England Base Rate (subject to a minimum Base Rate of 1.5%)
  • Interest Rate Margins are subject to status and due diligence
  • Extending above 90% MV3: considered subject to borrower profile, valuation and DSCR
  • For care home transactions, please speak with your BDM/ SRM for full details on required information

Products

Up to 70% MV/90% MV3   |   Rate 3.75%   |   25 years (20 years for non-purpose built)

Up to 70% MV/100% MV3   |   Rate 4.00%   |   25 years (20 years for non-purpose built)

 

Specialist care operators (a minimum of five years as care home owner-operator, strong links to regulatory bodies and mature operational team)

  • Loan size for specialist operators: £500,000 to £10m (subject to a maximum of 5.0x EBITDA)
  • Loan-to-value for specialist operators: Lower of 70% MV1 or 120% MV3
  • Margins are above Bank of England Base Rate (subject to a minimum Base Rate of 1.5%)
  • Interest Rate Margins are subject to status and due diligence
  • Extending above 100% MV3 subject to borrower profile, valuation and DSCR
  • For care home transactions, please speak with your BDM/SRM for full details on required information

Products

Up to 70% MV/80% MV3   |   Rate 3.00%   |   18 years

Up to 70% MV/100% MV3   |   Rate 3.25%   |   15 years

Up to 70% MV/120% MV3   |   Rate 3.50%   |   15 years

 

Experienced operators (a minimum of two years as children’s day nursery owner-operator)

  • Loan size for experienced operators: £500,000 to £10m (subject to a maximum of 5.0x EBITDA)
  • Loan-to-value for experienced operators: up to 70% MV and 100% MV2, whichever is lower
  • Margins are above Bank of England Base Rate (subject to a minimum Base Rate of 1.5%)
  • Interest Rate Margins are subject to status and due diligence
  • Extending above 90% MV2: considered subject to borrower profile, valuation and DSCR
  • For care home transactions, please speak with your BDM/SRM for full details on required information

Products

Up to 70% MV/90% MV2   |   Rate 3.00%   |   20 years

Up to 70% MV/100% MV2   |   Rate 3.50%   |   15 years

 

First-time buyers/ new entrants (operator with less than two years experience/first-time buyer)

  • Loan size for first-time buyers/ new entrants: £500,000 to £5m (subject to a maximum of 5.0x EBITDA)
  • Loan-to-value for first-time buyers/ new entrants: up to 70% MV and 100% MV3, whichever is lower
  • Margins are above Bank of England Base Rate (subject to a minimum Base Rate of 1.5%)
  • Interest Rate Margins are subject to status and due diligence
  • Extending above 90% MV3: considered subject to borrower profile, valuation and DSCR
  • For care home transactions, please speak with your BDM/ SRM for full details on required information

Products

Up to 70% MV/90% MV3   |   Rate 3.75%   |   20 years

Up to 70% MV/100% MV3   |   Rate 4.00%   |   20 years

 

Product information correct as of  17/01/2024.

For intermediaries only.

Your home may be repossessed if you do not keep up repayments on your mortgage or a loan secured against it.

The Financial Conduct Authority does not regulate some aspects of corporate financial planning, property investment or buy to let lending.

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