Atom bank changes serviceability criteria

The changes will allow the lender to support more businesses

Atom bank changes serviceability criteria

Atom bank has revamped its serviceability criteria for both variable and fixed rate commercial mortgage products.  

The changes will see the criteria for its lending range simplified, including a reduction in minimum debt serviceability to 120% for owner occupied applications and 125% for commercial investment applications.  

The serviceability policy for commercial lending, the bank said, is in place to ensure businesses can maintain payments during periods of stressed earnings or cash flow and under a stressed interest rate.  

Atom bank said it is committed to making changes to increase the number of small businesses it is able to help in the current economic environment.

Since launch, Atom has also been providing lending options to the social care sector and is now enhancing its healthcare offering to support critical businesses in the dentistry and pharmaceutical sectors. Across both sectors, the maximum LTV against property for loans below £500,000 will be increased from 85% to 95%, with a maximum LTV of up to 100% against goodwill value.

Read more: Atom Bank amends lending criteria.  

“Our serviceability criteria is in place to ensure loans can be repaid during difficult times,” Tom Renwick (pictured), head of business banking at Atom bank, said. “While we are currently living through a particularly turbulent period, we felt the time was right to make significant changes to the policy to allow us to offer our award-winning commercial mortgages to more SMEs around the UK.  

“We are constantly looking at how we can best offer straightforward, transparent, and competitive products to our business customers. We expect that this change will allow more SMEs access to much needed finance, helping them to plan for the future and continue to thrive post-pandemic.”  

Renwick added that the bank also recognised that changes in the lender environment have hampered access to finance for both the dentistry and pharmaceutical sectors.

“We have collaborated with our intermediary partners to enhance our proposition in order to ensure these businesses have the access to the finance they need to achieve their goals and carry on the important work they do,” he said.