"We’re seeing lower rates across virtually all sectors of finance, even unsecured business loans. "
As well as the new entrants vying for business, Key Commercial is also seeing high street banks competing for market share, with one offering funding with no set-up fees, a three year fixed rate of only 4.89% and no early repayment fees.
Short term property finance is also exhibiting a marked downward trend in rates, with Key commercial receiving recent quotes of 0.75% per month for short term speculative commercial property funding, and no exit fees. This is a notable reduction from only two or three years ago when a similar deal would have been priced at 1.25% per month. In the meantime, short term residential finance is available from around 0.4% per month.
However, Key also point out that the Bank of England have stated they may well be putting up bank rate over the next few years and this could impact the sustainability of the 'downwards spiral' in rates in the medium term.
Tony Newham of Key Commercial Finance said: “The current market is very good for businesses, developers and property professionals to raise funds at very competitive prices. We’re seeing lower rates across virtually all sectors of finance, even unsecured business loans. However, it’s vital that those seeking funding for a project make use of an experienced broker that can source funds from the whole market to ensure the right finance is obtained in respect of the funding need and at the best price for that requirement.
“There is a sense that the cost of finance will rise if the Bank of England increase rates, but that could depend on how the various lenders are funded and there will still be low rates available from specialist and niche lenders that brokers such as Key have access to.”
