Allica Bank has launched a new bridge-to-term lending product aimed at reducing uncertainty and administrative burden for commercial property borrowers.
The new facility allows borrowers to enter a single seven-year agreement, starting on bridging terms and automatically converting to a lower-cost term loan once pre-agreed conditions are met.
Allica says the product is designed for owner-occupiers and investors undertaking projects that are not yet eligible for conventional term finance, such as those involving refurbishment or where the property is not yet income-generating.
The bank, which entered the bridging sector following its acquisition of Tuscan Capital in August last year, said the launch follows a record month for its bridging division in April.
Borrowers will only need to complete a single application and valuation, with one set of fees, removing the need to refinance or undergo duplicate underwriting when moving from bridging to term. At the trigger point, borrowers may also opt to release equity for further investment, and brokers will be paid commission at both stages.
Nick Baker, chief commercial officer at Allica Bank, described the launch as “a truly innovative way to give brokers and borrowers the certainty they need in a changing market,” adding that the new approach was intended to streamline the lending process and remove delays. “It’s a major step forward in our ambition for Allica to become a break-out bridging lender,” he said.
The product comes in two variants: the Stabiliser and the Improver. The Stabiliser is aimed at businesses that expect to meet commercial mortgage criteria over time and offers loans from £250,000 to £5 million, with initial rates starting at BBR + 6.45%. The Improver is designed for refurbishment projects, particularly those with a focus on environmental improvements, with loans ranging from £500,000 to £5 million and bridging rates starting at BBR + 7.05%.
In both cases, the loan converts to commercial mortgage pricing once the agreed conditions are met. For owner-occupiers, term rates start at BBR + 2.90%, and for investors, from BBR + 4.45%.
