Interest Rates
As part of our service to you, we will always find, or negotiate, the best rate we can for your loan.
For your benefit, it is important to understand the way that the market works. For asset-based commercial finance, the number of lenders in the market is smaller than for residential mortgages. Information is widespread, and most lenders know what others are charging. Therefore, rates tend to be very similar. Unlike the residential mortgage market, where lenders are lending on similar types of asset, commercial lenders split the market into sectors of business types (such as Industrial Property, Investment property, Leisure, Pubs & Restaurants etc).
It is important to commercial lenders to have balance in their loan portfolios so that it reflects the overall market, or their preferred historical market. If they are oversubscribed in a particular sector they will look to discourage lending in that sector by either charging uncompetitive interest rates or not accepting loan applications. The reverse also occurs; lenders may want to get into a sector and will charge lower rates. Fortunately for you we keep up to date information on these market trends.
Another factor which affect the interest rate is loan size. Lenders have fixed costs, and like to make a profit. It costs them as much to administer a small loan as a large one, and consequently the interest rates on small loans are generally inferior to those on large loans.
With all this in mind, we cannot offer a standard set of rates until we have individually assessed your case and discussed it with lenders who may have an interest. What we can say is that most loans for status business end up at 2-3% Bank of England Base with the higher end reflecting small loan size and/or high risk sector. For Buy to Let portfolios up to 10 properties the rates vary all the time and it is best to telephone us to see what we can find. For non-status loans, or adverse credit problems we can always try to help but the rate will reflect the added risk involved. Once again contact us to discuss the case.For budget purposes we would suggest you use a rate of 7% for your business plans and for development capital 10%; please note if your build project cannot support a rate of 10%, then you shouldn't consider it.
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