A new current account mortgage targeted at companies that own commercial premises has been launched by Mortgages For Business. The new product, said to be the first of its kind, also offers an overdraft facility. According to the lender, it will enable companies to use the security of their premises to consolidate their borrowing.
David Whittaker, managing director, said: ‘It allows businesses to utilise their property and lock the borrowing potential into their business.’
The main advantages of the product are that the overdraft facility should be cheaper than the borrower’s existing one and online internet access is offered which will allow businesses to move money between different accounts.
Flexibility is also central to the product. Up to 30% of the loan to a maximum of £300,000 can be drawn, repaid and redrawn without incurring any penalties.
The mortgage offers an LTV of 80% and mortgages are available from £50,000 to £5m.
Whittaker said: ‘As property values have grown over recent years, companies that own property now enjoy higher levels of equity. Businesses need to manage their risks carefully in all economic conditions. With this scheme they will enjoy greater flexibility and be able to take more control of their assets and cashflow.’