News

Market Update

The Bank of England voted to keep interest rates at 4.25%. The news came despite some criticism and belief that a cut would help a sluggish economy. The base rate, which affects how banks determine their lending and savings rates, remains at levels that some believe are impacting household finances during a period of slow economic growth and creating difficulties for trading businesses.

Inflation is at 3.4 per cent, well above the Bank’s two per cent target, but slightly lower than April’s 3.5 per cent. Many expect price pressures to persist in the coming months before easing next year. In addition, escalating tensions in the Middle East are causing markets to worry about potential inflation due to the threat of oil price increases.

So, how have the lenders reacted, and what can they offer to ease the pressure on trading businesses?

The Omega team are seeing favourable terms from lenders and a positive reaction in the market in respect terms of providing commercial finance solutions that meet demand and need.

New Commercial Bridging Terms launched to support investors and business owners.

Property investors and trading businesses can benefit from new terms launched on a short term basis offering clients the ability to undertake works, correct an issue, stabilise cashflow or many other options, before switching into a pre-approved term facility.

Trading businesses buying premises or Commercial Property Investors can use an initial loan to fund refurbishment and interest costs before either the premises allow occupation or their business meets affordability criteria of the lender for a longer term loan. This is one single loan with no need to refinance, once initial requirements are complete the loan automatically moves to the lower interest rate for the term loan, saving on refinance costs.

This also allows our clients to benefit from the enhanced value add, with certainty on exit.

Trading businesses consolidate debt

Businesses that had to take loans during the pandemic to ensure they could continue trading have been fighting to ensure cash flow continues above rising interest rates, squeezing available capital. The team have been working with our introducing partners, brokers and IFAs to secure deals and products that ease the debt pressure.

Case study 1

Terms agreed for a trading business in an Opco Propco structure

1.79% over base rate allowing debt consolidation across numerous loans taken during the pandemic and beyond.

Refinance and restructure will save the client c£19k per month across all loans vs the new facility, also releasing equity for continued investment

Case Study 2

Another lender able to support ground-up development for owner occupation, funding at maximum of 80% of the end value of the finished site.

It’s a positive reaction from lenders that is sure to help trading businesses achieve what they need, whether free up cash flow, support the build of new premises, refurbish a new purchase to allow occupation or simply time stabilise the business itself.

Contact us if you have a client that needs to access solutions like these.