It’s never a certainty that a new product is going to be a success — you can do all the market research that’s possible and repeatedly talk to trusted intermediaries about the proposed new deal, but until it is live you won’t know if it will be well-received in the marketplace.
Thankfully for Alternative Bridging, our most recent product revamp went very well.
In December 2023 we relaunched the Alternative term loan with no ERCs.
The Alternative term loan is available for terms from three to five years, up to a maximum loan to value (LTV) of 70% and a maximum loan size of £4m, and can be used for purchase, refinance and property improvement.
With the new product, we are offering finance to property developers and SME owners to assist new and growing businesses, for asset management situations or to release working capital.
We therefore assumed that because our product comes with no ERCs, we would see strong demand for it from those who wanted to hedge their bets with regards to interest rate changes and react to any quickly.
The good news for us is we have! Interest has been reassuringly keen, with intermediaries recognising how our product stands out from all the other term loans in the market.
What we hadn’t particularly anticipated was that we would also receive a lot of interest in the product from BTL investors who want a term loan — perhaps for purchasing an office building — but are put off by large, upfront fees that lenders generally charge with a term product.
In comparison, the Alternative term loan not only doesn’t have any ERCs, but also doesn’t have an upfront fee.