Nationwide commercial streamlines lending
January 9, 2008
In light of the damaging and chaotic effects of the ongoing credit crunch Nationwide Commercial has announced that it will no longer be considering loans to new borrowers, and will only consider business with existing borrowers. The lender has also stated that it will no longer be accepting referrals from brokers for its commercial lending division. This comes after the lender was flooded with requests for commercial loans in light of the borrowing difficulties that many were experiencing because of the global credit crunch.
An official from Nationwide Commercial stated: “I am using market conditions to be very selective about the type of lending we do. There is an enormous appetite out there for borrowing, half of my competitors have disappeared and a lot of people are looking for finance.”
He added: “We want meaningful relationships with customers and because of this we feel this is the time to stand by our existing customers rather than take on new customers.”
There were rumours that the Royal Bank of Scotland had taken similar steps, but officials from RBS have denied this.
One official stated: “At times like this you have to remain true to your principals. When it comes to lending money you always have to be fairly cautious and prudent and nothing has changed. We feel that our relationship management model is robust and comes to the fore at such times as we are engaged in long-term strategic debates with our customers, and funding lines are put in on this basis.”
One industry official added: “Banks deciding that they want to call in term mortgages for their customers could lead to more business for specialist lenders. They are becoming slightly more restrictive plus borrowers are looking to re-finance overdrafts and other borrowings and are looking for alternatives. We have seen a lot of demand and have had record enquiries for October and November.”
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