Octopus Property has launched its first commercial term loan product with the aim of taking a share of the £16bn annual market dominated by UK high street banks and building societies.
The product for commercial investment properties is solely funded by Octopus Choice, the peer-to-peer platform launched by Octopus earlier this year.
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- to five-year terms. Loans will range from £500,000-£2m.
It has no early repayment charges after 24 months. An interest cover ratio of 1x will be applied, based on net rental income.
Ludo Mackenzie, head of commercial at Octopus Property, said: “According to the recent De Montfort report, in the first half of 2017 more than £8.1bn worth of senior term lending in the UK was undertaken by UK banks and building societies, which is by far the biggest segment of the market.
“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.”
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