SMEs targeted by new bridging loan business arm


Small and medium sized businesses (SMEs) in need of bridging loan finance are being targeted by lender Amicus Commercial Finance.

To be launched next January, Amicus says it will provide small businesses with ‘working capital facilities’.

In order to access the bridging loan funding, SMEs must have sales worth between £500,000 and £5 million.

The chief executive of Amicus, John Jenkins, said that the larger subsidiaries owned by banks are responsible for 85% of lending to small business.

Working with a bridging loan provider

However, because of cost savings, he added, many of these subsidiaries can no longer afford a local relationship-based service which professional service organisations, as well as small firms, value highly when it comes to working with a bridging loan provider.

Mr Jenkins said: “Many new entrants focus on larger businesses, we believe there is an opportunity in providing a proposition combining customer service, a transparent fee structure and innovative products which are powered by the latest technology.”

Amicus says the move is part of its strategy of entering specialist lending markets that are being poorly served by other lenders.

Bridging loans are becoming increasingly attractive to SMEs who are often looking for financial help during a cash flow squeeze.

Alternative lenders for bridging loans

This means there has been a growth in the number of alternative lenders for bridging loans targeting sector.

The loan itself is for a short-term and is secured against an asset, generally a property, though the loans do have a relatively high rate of interest.

For SMEs waiting for a customer to pay a large outstanding invoice, a bridging loan will help them through the cash shortfall to pay their bills or wages or even help them buy another property, for instance.

Landlords enjoy boom in buy to let mortgages

Meanwhile, the current buy to let boom in the UK is showing no signs of abating with more mortgage deals are never available.

According to the Council of Mortgage Lenders’ Bob Pannell, the sector is enjoying ‘it’s best spell since 2008’.

Despite mortgage lending running below the pre-economic crisis high of £350 billion in 2007 the number of buy to let mortgage products is currently at a seven-year high.

Buy to let mortgage deals

Landlords, and potential landlords, how a choice of more than 1,200 buy to let mortgage deals, according to the website Moneyfacts.

The site also points out that the number of buy to let mortgages currently being taken out is being fuelled by landlords remortgaging their property portfolio.

In addition, the current low interest rate environment is also attracting landlords to remortgage on fixed rate deals in a bid to beat the expected rise in interest rates.