All about interest - There are two types of interest rate

Variable interest

With a variable interest rate, we charge a margin above our base rate, which is linked to the Bank of England base rate. This means that the rate you pay goes up or down in line with movements in market rates.

Fixed interest

With a fixed rate, the rate you will pay is set at a fixed level for an agreed period – either the whole term of the loan or a shorter period. The actual rate will be that quoted on the day of completion, although for larger advances it is possible to pay a holding fee to pre-book the rate. Details are available on request. If you wish to prepay a fixed rate loan, you may have to pay a redemption fee, which, if fixed rates fall, could be substantial. An early redemption charge is payable on a fixed rate loan when our current standard fixed lending rate is lower at the time you wish to repay an existing fixed rate loan, than the standard fixed lending rate applicable when you took out your loan. We will advise you of any redemption fee involved on request.

For both variable and fixed interest rates the amount you pay is a combination of the money market rate (i.e. the rate AMC has to pay) and our margin. The latter is negotiable, according to the strength of your business and the size of the loan. We recommend you to consult your financial adviser about your choice of interest and repayment terms.

Interest calculation

We calculate interest daily, on the actual capital outstanding on that day. Any capital repayments are applied immediately to the account.

Interest charging

Interest is charged on a monthly or quarterly basis (depending on the customer requirements), on a given day, but payment is not due for 17 days thereafter. This means that when your statement arrives you will have 14 days’ advance notice of the amount due.

Payment

Instalments can be paid monthly, quarterly or half-yearly on dates that suit your cash flow of your business. If you decide to pay on a half-yearly basis, please note that since interest is calculated on a daily basis and charged monthly or quarterly, you will incur additional interest charges because of the delay in interest collection. An alternative arrangement is a fixed interest only loan that provides for a regular repayment.

Instalments

Your options include both repayment and interest only loans. Where instalments consist of interest only, the capital sum must be repaid at the end of the term. There is no mandatory requirement for you to purchase life or endowment cover or payment protection for your loan.

Quarterly or monthly interest?

Interest is charged quarterly in arrears for all borrowings except Flexible Facilities (which charge monthly in arrears) and long-term loans where you choose to pay monthly.