Allica Bank Scraps Arrangement Fees on Commercial Mortgages Over £750k to Fuel SME Growth

Quick Summary

Allica Bank is waiving commercial mortgage fees for loans exceeding £750,000 until September 30, 2026. This initiative aims to support UK SMEs by reducing upfront costs, potentially saving business owners up to £300,000, while simultaneously increasing Loan-to-Value (LTV) limits to 77.5% for larger property investments.

How can businesses save on commercial mortgage fees?

Established businesses can now access commercial mortgage fees waivers on significant borrowing amounts through Allica Bank’s limited-time promotion. By removing these costs, the bank enables owners to reinvest capital directly into their operations rather than losing it to administrative overheads. The waiver applies to owner-occupier and investment mortgages over £750,000, as well as specialist buy-to-let loans over £1.5 million.

• Potential savings range from £11,250 on a £750k loan to £300,000 on a £15m mortgage.
• Eligible window runs from July 7, 2026, to September 30, 2026.
• Target audience includes UK businesses with 5 to 250 employees.

What are the new lending criteria for Allica Bank?

Beyond the fee waiver, Allica Bank is expanding lending appetites to provide brokers with greater flexibility. The bank has increased its maximum Loan-to-Value (LTV) to 77.5% for mortgages exceeding £3 million, significantly lowering the deposit barrier for high-value acquisitions. Furthermore, the cap for single-tenant commercial properties has been raised from £2 million to £5 million, provided the lease has at least five years remaining.

"Brokers play a key role in supporting established businesses’ growth ambitions, and they have told us they need more support when it comes to larger, more complex commercial mortgages, especially where clients are weighing up significant upfront costs and tighter lending criteria." said Nick Baker, Chief Commercial Officer at Allica Bank.

Why is Allica Bank targeting larger commercial loans?

The strategy focuses on empowering broker partners to service the "missing middle" of the UK economy—established SMEs that are often underserved by high-street banks. By reducing upfront barriers and increasing leverage options, Allica aims to capture a 10% market share within five years. This move follows a series of rate reductions, positioning the bank as a high-growth challenger in the commercial lending space.

"At Allica, our ambition is to empower brokers to support the businesses they work with, and these changes are designed to do that. By waiving arrangement fees on bigger loans, we are helping established businesses, the backbone of the UK economy, hold on to more of their money so that they can continue to invest in their future." said Nick Baker, Chief Commercial Officer at Allica Bank.

FF NEWS TAKE:

Allica Bank’s decision to scrap commercial mortgage fees is a aggressive and calculated move to steal march on the 'Big Four' banks. By targeting the £750k+ bracket, they are specifically courting high-value, established SMEs that drive UK productivity. In a high-interest-rate environment, saving a client six figures in upfront fees isn't just a perk; it's a deal-maker that moves the needle for the entire commercial brokerage industry.