Cup kick-starts commercial deals

As we approach the knockout rounds of the World Cup this country is bathed in sunshine, unusually for this time of year. It occurs to me that despite analysts and economists telling us their thoughts on world markets and what drives the UK economy it\'s a simple equation - the economy is dictated by the weather and big sporting events.

The novelty of a heatwave always seems to create a lull in business terms. Fortunately, this is not something we have to worry about too often in this country, and the fact that most major sporting events are over within a few days means the effect on businesses is limited.

But with the World Cup involving a month of constant football and coinciding with the best weather we have seen for some time, it must be a concern for all businesses.

Business levels drop each afternoon as kick-off time approaches. And on days when England is playing you might as well send your staff home at lunchtime as productivity drops to zero, even if kick-off is not until 8pm.

But this obsession with the World Cup has fuelled innovation in the commercial marketplace with Norwich and Peterborough launching a competitive refinance product that it calls its World Cup Special. The product has a rate of base plus 1.25% for the term of the loan, no arrangement fee and free valuation. It is available on loans of between 100,000 and 500,000.

As you would expect on a product this competitive, it won’t be around for long. Indeed, the building society says it is only available while England remains in the competition. So judging by the team’s performances against Paraguay, Trinidad and Tobago and Sweden you may need to act fast to secure this product for your clients. By the time you read this we will know whether this deal has been withdrawn or not.

But let’s hope the end of the World Cup will not see an end to innovative products of this sort in the commercial sector. Quiet periods of business tend to focus lenders’ minds and encourage original thinking, but the market needs this type of product development more often.

Making innovative products available to brokers will encourage more clients to use intermediaries for their commercial finance needs and not to take the usual path to their own bank. Perhaps the World Cup is just the kick-start the commercial mortgage industry needs.