Allica Bank launches interest-only commercial mortgages

Businesses that want to access the product must be eligible for the scheme and have a turnover of up to £45m. This can include businesses that have previously taken out government-backed support such as the Bounce Bank Loan Scheme and the Coronavirus Business Interruption Loan Scheme. 

The Recovery Loan Scheme (RLS) allows small and medium-sized businesses to access the finance needed to invest and expand. 

The maximum loan size for Allica Bank’s interest-only product is £2m and subject to a business’s eligibility. 

The loan can be used to purchase or refinance a property which will be used by the applicant either under their individual name or under their company name. 

The rate is dependent on the sector a business operates in, the property which is being lent on and the financial strength of the business. 

A missed opportunity

Nick Baker, chief commercial officer at Allica Bank, said: “A lack of understanding of the RLS has meant many businesses are missing the opportunity to secure the finance to grow at a time when the British economy needs growth more than ever. Many business owners, for example, think they can only use an RLS-backed loan to help with recovery from the Covid pandemic, but really it can support with all types of situations, such as buying commercial property, acquisitions and refinancing.  

“The additional paperwork is also a lot easier than many people realise, with much of the extra admin falling on the lender rather than the borrower.” 

He added: “We’re delighted to be able to offer interest-only, owner-occupied commercial mortgages with terms of up to five years – which we’re only able to do thanks to the RLS – as we look to help an even wider pool of businesses achieve their goals.”