Allica Bank counters economic uncertainty with fixed-rate commercial mortgages

Allica Bank, the challenger SME bank, is boosting its product portfolio with plans to launch a suite of fixed-rate commercial mortgages.

The bank says SMEs and brokers have been demanding the bank offer fixed-rate commercial mortgages, following the Bank of England’s decision to increase the Base Rate from 0.5 per cent to 0.75 per cent in March and rising business costs.

Allica Bank,which closed a funding round of £110m last year, its largest to date, said it was initially launching a five-year fixed rate commercial mortgage product.

Other term lengths would follow in time, it said.

Conrad Ford, chief product & strategy officer, said “With gas prices, interest rates and other business costs all currently on the rise, these are uncertain times for business owners as they look to plan for their future. 

“Our broker and introducer communities have been clear that their clients would benefit from the certainty of a fixed rate, and I’m pleased we’ve been able to deliver on this at such a critical time."

Allica Bank,which has pledged to make £1bn in committed loan offers this year, has made several changes to its commercial mortgage proposition in recent months.

This includes cutting interest rates on its variable-rate mortgages and upping its maximum customer exposure for care home commercial mortgages to £10 million. 

Allica Bank, which was granted a UK banking licence in 2019, has offices in Milton Keynes and London.

It offers businesses asset finance products, commercial mortgages and business savings accounts.