Octopus Property launches first commercial term loan product, offering 5.5% yield

By Daniel Lanyon on Tuesday 31 October 2017

Alternative Lending

The platform says it is targeting a £16bn annual market traditionally dominated by UK high street banks and building societies.

The platform says it is targeting a £16bn annual market traditionally dominated by UK high street banks and building societies.

 

Octopus Property has launched a new commercial term product as it looks to take market share from UK high street banks and building societies.

Part of its Lifecycle Lending proposition, the new product will offer exposure to real estate and is solely funded by Octopus Choice, the P2P platform launched by Octopus earlier this year.

It is designed for short-term borrowing requirements or where properties have little or no rental income, the firm says.

It targets  a 5.5 per cent interest yield and has no amortization. Loans typically range £0.5m-£2m with 2-5 year terms. Maximum loan-to-values of 65 per cent will apply.

Ludo Mackenzie, head of commercial at Octopus Property, says, citing a recent De Montfort Report, that in the first half of 2017 over £8.1bn worth of senior term lending in the UK was undertaken by UK banks and building societies, 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,” he said.

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