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Managing loans and interest

Fixed rate business loan

The fixed rate business loan has one fixed interest rate applied for the term of the loan. Should market interest rates rise or fall during the term of the fixed rate business loan, the interest cost will be unchanged.

Loans subject to eligibility and status.

Once the facility has been drawn, any early repayments to the loan may incur an early repayment charge. The amount of the early repayment charge is dependent on market interest rates at the time of making the changes. The early repayment charge will be capped at a maximum figure of 1% of the capital of the loan outstanding at the date the charge is incurred ("the early repayment charge date") multiplied by the number of anniversaries of the date of utilisation of the loan remaining during the period from the early repayment charge date until (and including) the maturity date of the fixed rate period. These costs may be substantial.

Please note that security may be required. Any asset used as security will be at risk if you break the agreement and may be sold to repay your debt.

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Interest rate risk management

Please be aware that there are certain foreign exchange and currency, interest rate and commodity products offered by us that may stop you, either in part or full, benefiting from any favourable changes in the underlying market.

Corporate and commercial customers with experience of interest rate derivative transactions may wish to consider interest rate risk management solutions. These offer flexible, tailored solutions to help manage interest rate risk.

How it works

Interest rate risk management could help protect your business by hedging interest costs. Solutions offer flexible maturity dates and premium based or zero up-front premium structures. However if you opt for one of these solutions, you may no longer be able to participate in favourable interest rate movements beyond certain rates and if you wish to change the terms of the solution or cancel it break costs may be payable. There is no limit to the amount of these break costs as they are dependent on interest rate levels and market expectations of how they may change at the time you wish to change or cancel the solution. We will provide you with projections of what break costs may be in certain scenarios; you should be aware though that it is not possible to forecast what break costs will be in all future scenarios.

Features
  • Certainty – against adverse interest rate movements beyond certain rates, with the option to choose to benefit from certain favourable rate movements
  • Choice – gives greater flexibility than a fixed rate loan
  • Options – no credit facility required for some products
  • Limitation - you may no longer be able to participate in favourable interest rate movements beyond certain rates
What it costs
  • An up-front premium may be due for certain products, dependent on the size, term and type of structure. There are also some zero up-front premium products available, which build in additional charges to the interest rate.
Important facts
  • Interest rate risk management solutions are only offered to clients with interest rate costs - trading of a speculative nature is strictly prohibited
  • Credit line may be required. Ask relationship manager for details.
  • For some products a break cost, which could be significant, may be payable if you seek to break the terms of the contract. You should take account of the likelihood of incurring break costs and what causes them to increase before you opt for an interest rate risk management solution.
  • Interest rate risk management may affect the interest rates you pay adversely and may not be suitable for your business circumstances. You should always be aware of and consider the circumstances in which it would cause your business to pay higher interest rates than the prevailing market interest rate.
  • Further information is available on request.

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General enquiries
Call us on
0800 032 3971

Monday - Friday 8am - 6pm


Existing customers

Contact a relationship manager or call our Business Direct team


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