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Scottish bank stops commercial property lending

Category: Scotland Finance News — Gary Cain on January 16, 2012

The apparent ‘reduced appetite’ in the market, has seen the Glasgow-based Clydesdale Bank put its commercial property lending on hold.

Making the announcement, the company which is wholly owned by the National Australia Bank Group, said that support would continue to be in place for existing customers.

With more than £7 billion having been lent to businesses within the past two years, this will come as welcome news. However, there will be “tighter controls” implemented by the bank for existing customers too, which could worry some.

The statement released by the bank claims these changes are a sensible move, with commercial property lending becoming a lesser sought facility from banks and traditional lenders in the field.

Alternative financing

The news comes with an increasing popularity for alternative financing in the country, with Scottish factoring companies dealing with a rise in client numbers.

For many, the exploitation of these facilities makes perfect sense. Through the use of invoice discounting services, much needed income can be accessed readily, with fewer restrictions imposed.

Furthermore, as reliable cash flow becomes a priority with the economy continuing to see much uncertainty, having funding in place to respond quickly to opportunities can help accelerate growth whenever available.

Capital boost

The parent company of Clydesdale has also authorised an extra allocation of capital to the tune of £400 million, to it and its English subsidiary Yorkshire Bank.

This is largely as a result of banking regulators looking for higher levels of capital from the banks, with a further economic downturn throughout the UK thought possible over coming months.

'Disclaimer: The information contained in these articles is of a general nature and no assurance of accuracy can be given. It is not a substitute for specific professional advice in your own circumstances. No action should be taken without consulting the detailed legislation or seeking professional advice. Therefore no responsibility for loss occasioned by any person acting or refraining from action as a consequence of the material can be accepted by the authors or the firm.

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