By Rachel Williams
The ZIFA Mortgage Network and the Bank of Scotland have teamed up to offer company directors and the self-employed access to business finance without the hassle and costs typically associated with arranging this type of loan.
The Adaptable Mortgage Plan Plus, which is financed by Bank of Scotland and distributed via the ZIFA Mortgage Network, allows clients to access equity in their main residence to fund a flexible business loan or overdraft.
Andy Young, director of the ZIFA Mortgage Network said: “This unique product perfectly meets the needs of this market. Business people can use it to raise money to inject into their business, or to refinance existing business loans without the need to supply extensive account information.”
The mortgage is available to 85% of the individual’s property value and, because borrowing is at residential rather than commercial rates, the package is also cost effective. Rates are guaranteed to remain at 1% over bank base rate for the length of the term.
Young said: “Traditionally business people have to pay between 3% and 5% over bank base rate for their business borrowing.”
The deal also aims to make it easier for individuals to arrange the loan, as it requires no details of income or evidence from accounts.
Young said: “Historically, this market has had difficulty retaining borrowing to suit their lifestyle. Good accountants will look to minimise their true net profits which may not reflect the borrowing potential of the individual.”
Borrowers are also able to structure repayments to suit their own needs.
Underpayments can be made on a monthly basis, or until the amount under paid reaches 5% of the original property value.
They can also take a payment holiday of up to six months, or until the missed repayments reach 5% of the property value.
Early redemptions can also be facilitated through an over payment option. This can be done via monthly or lump sum over payments. Alternatively it means the borrower can overpay when interest rates are low and reduce payments should they rise.
With a cheque book facility borrowers can also withdraw funds up to 10% of the property value, preventing the need to arrange a separate personal loan.