Non-Bank Leaders in the UK Pour Money into Commercial Loans

[Corey Dutton]

According to a recent article from the Financial Times, non-bank lenders such as insurance companies, hedge funds, debt funds, and the like are pouring money into commercial loans. Almost 25% of new commercial loan originations in the UK in 2013 came from non-bank lenders, and about 50% of that number came from insurance companies. This is largely attributed to low interest rates, which have prompted investors to look for higher yields. Bill Maxted, a researcher at De Montfort University said, “There are more lenders in the market and there is a real competition, with interest rates margins falling and loan to value ratios rising, there are some quite aggressive terms being offering by debt funds in particular.”

(Source: Financial Times: http://www.ft.com/intl/cms/s/0/2d48ab1e-dcfe-11e3-b73c-00144feabdc0.html?siteedition=intl#axzz32vRmZn00)

Posted by Corey Curwick Dutton