Birmingham Midshires has announced plans to grow its current commercial assets from £500m to more than £2bn within five years with the launch of a dedicated commercial lending division.
Birmingham Midshires Commercial has been unveiled as the Halifax Group’s only provider of commercial loans up to a value of £10m. The new subsidiary, launched at the start of September, will focus on mortgages between £100,000 and £10m for business owner-occupiers, residential investment and commercial investment purposes. The group expects the bulk of new business to come from mortgage intermediaries. High street lenders dominate the commercial market but the concept of long-term mortgages for the business sector is relatively new and is usually provided by niche lenders. Peter Townsend, head of Birmingham Midshires Commercial, said: “This is the weak link in the high street’s armoury of services, and there is a vast market out there. We are offering 20-25 year mortgages.”
The structure of loans will be similar to that of residential mortgages. Interest rates will be between 1-2.5% above the SVR, depending on the assessment of the group’s regional development officers who will study the accounts and marketing strategy of a business before making an offer.