Octopus Property has expanded further into commercial lending with its first commercial term loan product.
The lender says it wants to target a share of the £16bn annual market traditionally
dominated by UK high street banks and building societies.
The interest-only product will be fixed at 5.5 per cent per year with no amortisation, up to 65 per cent LTV. It has two- or five-year terms.
The loan is available from £500,000 to £2m. It has no early repayment charges after 24 months.
An interest cover ratio of 1x applies, based on net rental income.
The product is solely funded by peer-to-peer platform Octopus Choice.
Octopus Property head of commercial Ludo Mackenzie says: “With this new product we are confident of appealing to both new and existing borrowers, combining the speed and certainty of a specialist lender with the lower cost of debt traditionally associated with high street lenders.”
Octopus Property fund manager Nick Westoby says: “This product allows a borrower to raise higher levels of debt and keep more of the rental income, while also enabling them to finance assets with shorter leases, or take an interest payment holiday to cover lease expiries and break options.”