Allica enhances commercial offering with stress test cuts and higher LTVs

Allica has reduced its stress test on commercial mortgage variable rate loans from 3% to 1.5% above the Bank of England Base Rate. This means that the same level of profit generated by a business will now enable them to be considered for a higher loan with the bank.

Allica has similarly lowered its DCSR from 150% to 130% across all commercial mortgage products. By considering a lower level of income, Allica hopes to be able to increase the level of support it can provide to businesses.

For ‘prime’ businesses that achieve income levels that enable them to cover loan repayments by at least 200%, Allica has also increased its maximum LTVs by 5% without any change to pricing on owner-occupied commercial mortgages.

Allica’s asset finance customers will also benefit from reduced DSCR, lowering from 140% to 125%.

Nick Baker, chief commercial officer at Allica Bank, said: “In seeing a stabilising market, and following a period of uncertainty, we want to make sure that businesses have access to the lending that will enable them to invest in their futures. Ultimately, these changes mean businesses can do more with less, and that we can lend more to more businesses, building on Allica’s ambition to be the true alternative to high street banks.”

The news follows Allica’s recent extension of its owner-occupied mortgages proposition to include interest-only terms of up to five years for businesses qualifying for the Recovery Loan Scheme.