A personal approach to finance

A personal approach to finance


In recent months, the news has been full of stories about UK banks and the level of lending in both the private and the commercial arena. With the threat of a debt-deflation cycle, and with no more room to cut interest rates, the Bank of England has embarked on a programme of quantitative easing - essentially creating new money to inject into the economy.

Nevertheless, it remains hard for many borrowers to find the most appropriate borrowing facility in the current market, whether they are looking for help with purchasing a property, releasing value in assets or to provide more flexibility in their spending.

Coutts is very much open for business and continues to work closely with clients to find the solution that best fits their personal objectives.

Our flexible range of borrowing services allows us to structure solutions to meet our clients’ individual requirements. The interest rates and fees are agreed individually, depending on the characteristics of the transaction.

Mortgages

In these turbulent times, home-buyers may face some challenging questions about their mortgage arrangements, such as whether now is a better time to take out a fixed or a variable rate mortgage and for what length of time.
 
The Coutts mortgage service is designed to make the process of securing property finance as simple as possible, with the aim of integrating this borrowing into the overall wealth management strategy of our clients.

Mortgages are available with fixed or variable rates, or a combination of the two, with repayment options ranging from standard capital and interest, to bullet repayment.

A variety of options are available, such as:

Mortgage Reserve Account
This is one of our more flexible products, enabling clients to borrow against the value of their property, repaying and redrawing the advance as many times as they want. If clients think interest rates may rise, they can choose to take a portion at a fixed interest rate.

Fixed rates
Some money market commentators are suggesting that, with rates at their low point for this cycle, now may be the right time to consider getting a fixed rate. Alternatively, clients can mix and match fixed rates with our variable rate mortgage or Mortgage Reserve Account to hedge their interest rate exposure.

We currently offer a range of fixed interest rates for 2, 5 and 7 year terms, which can be found at www.coutts.com/mortgages    

Borrowing for property investment

Many of our international clients have property interests in the UK, particularly London, which has long been a favoured destination with its links to Europe and the United States.

With sterling having depreciated heavily in the last 12 months against most major currencies, and with the reduction in UK property values, some properties are effectively up to 50% cheaper in real terms than last year. Combined with historically low sterling interest rates, borrowing for property investment could be an attractive option for an individual with an international perspective.

Commercial lending

The current environment brings with it some short-term trading issues, particularly for small and medium-sized enterprises. That requires a proactive approach from lenders too.

As you may be aware, Coutts has a commercial banking service, and we are responding to the downturn in the economy by continuing to support businesses and entrepreneurs through flexible lending, including overdrafts, loans, asset finance and invoice discounting.

Every business and lending proposition will be unique, but funding requirements and appropriate solutions can be broadly categorised as: 

  • Working Capital – the need to finance cash flow timing mis-match between incoming and outgoing payments.
  • Capital Expenditure – the purchase of assets key to the efficient running of the business. 
  • Investments – intangible assets e.g. marketing, advertising, R&D normally viewed as equity risk and financed by shareholders. However, bank finance can be possible depending on the strength of the balance sheet.
  • Acquisitions – an equity risk financed by shareholders, or part bank loan, depending on the nature of the acquisition.

The emphasis on all our lending facilities is to build a service that fully meets the client’s particular requirements. All applications start with a discussion between the client and their commercial banker and are assessed individually, based on both financial and non financial information, such as the business’ background, market place and management experience.

This gives us the opportunity to advise what funding solution best fits with the client objective.

Further information

To find out more about the Coutts mortgage service, please visit  www.coutts.com/mortgages     

For more information on Commercial Lending, please contact Steve Walder on steve.walder@coutts.com