Octopus Real Estate Reading time: 3 mins

Octopus Property launches first commercial term loan product

30 Oct 2017
  • Targeting £16bn annual market traditionally dominated by UK high street banks and building societies
  • Bolsters Lifecycle Lending proposition

Octopus Property, the specialist finance provider, today announces the launch of its new commercial term product as it looks to take market share from UK high street banks and building societies.

This latest product offering adds to the growing range of competitive and flexible products the business now offers borrowers as part of its Lifecycle Lending proposition. This has seen the company rapidly expand its product range to enable borrowers to switch products easily during the course of their real estate investment, and development strategies, without experiencing additional fees.

Octopus Property has created a straightforward term product for commercial investment properties, which is solely funded by Octopus Choice, the peer to peer platform launched by Octopus earlier this year. This product will dovetail with the existing bridging product, which is suitable for short-term borrowing requirements or where properties have little or no rental income. In the three years to September 2017, Octopus Property’s commercial team has successfully deployed over £423 million into bridging finance.

Key features of the new product include:

  • 5% per annum fixed
  • Interest Only. No amortisation
  • Loans from £0.5m-£2.0 million
  • 2-5 year terms
  • A maximum loan-to-value of 65%
  • No Early Repayment Charges after 24 months

An interest cover ratio (ICR) of 1.0x based on net rental income

Ludo Mackenzie, Head of Commercial at Octopus Property, added:

“According to the recent De Montfort Report, in the first half of 2017 over £8.1bn worth of senior term lending in the UK was undertaken by UK banks and building societies, which is by far the biggest segment of the market. With this new product we are confident of appealing to both new and existing borrowers, combining the speed and certainty of a specialist lender with the lower cost of debt traditionally associated with high street lenders.”

Nick Westoby, fund manager at Octopus Property, added:

“We’ve used our market knowledge and expertise to develop a product that can help borrowers achieve their goals. We always work closely with our network of intermediaries to fully understand what borrowers want and how we can help them. This product allows a borrower to raise higher levels of debt and keep more of the rental income, while also enabling them to finance assets with shorter leases, or take an interest payment holiday to cover lease expiries and break options.”

Today’s news follows swiftly on the heels of the launch of Octopus Property’s latest institutional commercial debt fund, CREDF II, which announced a first close of £115 million at the beginning of the month. The funds will be deployed primarily into short term acquisition and refinancing opportunities.


For journalists in their professional capacity only. The value of an investment, and any income from it, can fall or rise. Past performance is not a reliable indicator of future results. Investors may not get back the full amount they invest.  Personal opinions may change and should not be seen as advice or a recommendation. Tax treatment depends on the individual circumstances of each client and may be subject to change in future.  We do not offer investment or tax advice. We recommend investors seek professional advice before deciding to invest. Unless otherwise stated, all data and factual information provided within this document is sourced to Octopus and correct at 30th October 2017.

Octopus Choice is a trading name of Octopus Co-Lend Limited, 33 Holborn, London EC1N 2HT, which is authorised and regulated by the Financial Conduct Authority.  The firm is on the Financial Services Register FCA registration number: 722801. Octopus Choice is being distributed by Octopus Investments Limited, which is authorised and regulated by the Financial Conduct Authority. Registered office: 33 Holborn, London, EC1N 2HT. Registered in England and Wales No. 3942880.