NACFB Magazine - July 2017 by NACFB

Issue 48 July 2017

The magazine for the National Association of Commercial Finance Brokers

Another year of breaking records In this issue

Business confidence hangs in the balance The industry reacts to the general election results

The effects of GDP fluctuations UK economic growth and the property sector

Talking points for the North Whatâ&#x20AC;&#x2122;s driving the increasing interest in this market?

LOGO

SPECIALISTS IN GOOD SENSE

REGULAR SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

Our business is built on relationships, and we rely on the support of our Broker Partners to deliver transparent lending solutions to the professional investor, landlord and SME community. A flexible approach to both client and security: n

Short Term lending from 0.55%

Term lending from 2.99% above 3 month LIBOR*

Ltd companies, LLPs & Individuals

Broad range of security including HMOs & multi-lets

S TA C K E D ( S M A L L U S E ) SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

*Shawbrook Bank applies a minimum floor of 0.75% to the LIBOR rate

D I S C U S S YO U R C A S E S TO DAY

0330 123 4521 or email cm.broker@shawbrook.co.uk

Welcome | NACFB OFFSHORE

When we prepared In this July issue our budget for 2017, we anticipated a NACFB News Spotlight small, but steady fall4-6 In the news 28-30 Bridging & Commercial off in Member and 7 Notes from our sponsor Awards 2017 Commercial Finance Special Features Patron numbers due I N T E R N AT I O N A L ( J E R S E Y S U B S I D IEssential ARY ) 8-9 news bites 32-34 Business confidence hangs to two factors: the in the balance S H AW B R O O K I N T E R N AT I O N A L L I M I T E D Top Story 36 Alternative players to the unstable political 10 PCF Bank to relaunch with rescue of niche sectors enhanced broker offering climate, and the 38-40 The effects of GDP fluctuations on the Introducing Association’s own property sector 12 Just Cashflow launches 42 Taking another glance at tightening of our highly flexible loan product portfolio buy-to-let criteria and stronger Case Studies Industry Guides 14 Equity bridge supports 44-46 Talking points for the focus on compliance. digital advertising business As our finance director, David Newborough, shared with a packed hall on 21st June, the Association is far ahead of where we thought we would be. Membership is down only a little from its all-time peak, and Patron numbers have remained very strong. I’d like to remind all our Members and Patrons how grateful we are for your continued support. However, we are only halfway through the year, and if we thought the first six months of 2017 were politically uncertain, the next 18 months are liable to redefine the word ‘challenging’. Our goal will be to carry on offering them more under the NACFB banner. NACFB Compliance Services and MyNACFB are critical Member benefits which bring us strength in a period when we may need it most. It is another bumper issue this month, but the cover story is our Commercial Finance Expo – our biggest ever venue, our busiest ever crowd. Pictures and coverage begin on page 20. Best regards,

www.shawbrook.co.uk

Norman Chambers MD NACFB

Norman Chambers MD, NACFB

growth 16-17 Mixed-use repurposing helps revive derelict hotel 18 Seven limited company buy-to-lets, three locations

Cover Story 21-23 CFE 2017 Another year of breaking records

Patron Profile 24-25 Kuflink Bridging From fringe to mainstream

North 48-49 Is it time to look at asset finance from a new perspective?

Opinion & Commentary 50 52 54

Interest-only regulation could work Technology or tradition? Let’s aim for both Regulation: who is responsible?

Ask the Expert 26

Graham Hill, vehicle finance director at the NACFB

For further information Robin Skuse, press officer t. 020 7101 0359 Hamilton House, 1 Temple Avenue London EC4Y 0HA Email: admin@nacfb.org.uk Vera Sugar, editor t. 0203 818 0171 71 Gloucester Place, London W1U 8JW Email: vera@medianett.co.uk

ADVERTISING & EDITING: Medianett 0203 818 0163 www.medianett.co.uk DESIGN & PRODUCTION: Carbide Finger Ltd t. 0845 812 8206

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS

NACFB Magazine | 3

LOGO

SPECIALISTS IN GOOD SENSE

REGULAR SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

Short Term lending from 0.55%

Term lending from 2.99% above 3 month LIBOR*

Ltd companies, LLPs & Individuals

Broad range of security including HMOs & multi-lets

S TA C K E D ( S M A L L U S E ) SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

*Shawbrook Bank applies a minimum floor of 0.75% to the LIBOR rate

D I S C U S S YO U R C A S E S TO DAY

0330 123 4521 or email cm.broker@shawbrook.co.uk

Welcome | NACFB OFFSHORE

www.shawbrook.co.uk

Norman Chambers MD NACFB

Norman Chambers MD, NACFB

growth 16-17 Mixed-use repurposing helps revive derelict hotel 18 Seven limited company buy-to-lets, three locations

Cover Story 21-23 CFE 2017 Another year of breaking records

Patron Profile 24-25 Kuflink Bridging From fringe to mainstream

North 48-49 Is it time to look at asset finance from a new perspective?

Opinion & Commentary 50 52 54

Interest-only regulation could work Technology or tradition? Let’s aim for both Regulation: who is responsible?

Ask the Expert 26

Graham Hill, vehicle finance director at the NACFB

ADVERTISING & EDITING: Medianett 0203 818 0163 www.medianett.co.uk DESIGN & PRODUCTION: Carbide Finger Ltd t. 0845 812 8206

THIS ADVERTISEMENT IS INTENDED FOR INTERMEDIARY USE ONLY AND MUST NOT BE DISTRIBUTED TO POTENTIAL CLIENTS

NACFB Magazine | 3

NACFB | in the news

Welcome to your dedicated lending toolkit.

Association news and updates for July 2017

An update from our MD MD Norman Chambers met with eight Patrons and four potential new Patrons during the month of May. When meeting lenders who wish to work with the NACFB, we strive to establish the lenderâ&#x20AC;&#x2122;s attitude towards compliance and to understand how they plan to support our brokers, with specific focus on their USPs. We continue to turn down patronage applications from those lenders who cannot demonstrate their ability to fit in with our commitment to meeting and exceeding regulatory requirements across the field.

intermediaries.lendinvest.com

Get a quote for your next bridging loan online in seconds, as well as:

Compliance services Our new Membership Welcomes James Hinch As of 1st June, NACFB Compliance Services has a third full-time employee. James Hinch joins us from his previous position in BrightHouse Limited, where he specialised in compliance monitoring. James has worked in compliance within the consumer credit sector for a number of years, working with lenders and credit brokers, supporting and ensuring they fulfil their regulatory requirements. He brings invaluable experience and a broad skillset to the growing compliance team.

Service gaining popularity NACFB Compliance Services has received lots of positive interest since the launch of our website, and we are signing new subscribers daily. We have developed a full, bespoke suite of documents available, aimed at the commercial finance broker. These are free to all NACFB Compliance Services subscribers. Feel free to look at our website at:

www.nacfbcompliance.co.uk.

Online calculators

Brochure

Product guides

The NACFB has produced a new Membership Brochure for 2017/18. The new brochure sets out, over eight pages, the reasons why a broker should consider joining the NACFB, and represents the most visible of the many actions we are taking to bolster membership numbers and to spread the word about what the NACFB logo stands for today.

Helping F

und UK B

Case studies Dedicated events

usiness

Members hip brochure www.nac

fb.org.uk

LendInvest is registered at 8 Mortimer Street, London W1T 3JJ (Company No.08146929), and is authorised and regulated by the FCA, no FSCS. Your property may be repossessed if you do not keep up repayments on your mortgage. For intermediaries only.

4 | NACFB Magazine

NACFB | in the news

Welcome to your dedicated lending toolkit.

Association news and updates for July 2017

intermediaries.lendinvest.com

Get a quote for your next bridging loan online in seconds, as well as:

www.nacfbcompliance.co.uk.

Online calculators

Brochure

Product guides

Helping F

und UK B

Case studies Dedicated events

usiness

Members hip brochure www.nac

fb.org.uk

4 | NACFB Magazine

NACFB NEWS

Notes from our sponsor

An insight into property development

Karen Bennett Managing director of commercial mortgages Shawbrook Bank

LendInvest, in partnership with the NACFB, will be hosting one-day Property Development Academy courses on 27th September and 22nd November in London. The programme will be aimed at those looking to gain more knowledge of the property development process.

orking with the NACFB to promote the importance of education when it comes to the various challenges faced by our industry remains an important goal for Shawbrook.

Key topics that will be discussed: Searching, evaluating and acquiring your site

We regularly conduct our own research into the market to try and uncover the more pressing concerns faced by the broker community. However, independent research is always more powerful and we were pleased to discover that after commissioning an independent report, our own internal findings were largely validated. We worked with the Centre for Economics and Business Research to produce a comprehensive analysis of the private rented sector (PRS) and in particular the BTL market.

Prospecting for sites Understanding the valuation process and planning Structuring your professional team and getting your scheme built Streamlining the legal process Financial analysis and securing finance

Learn more and register at https://intermediaries.lendinvest.com

Announcing the NACFB’s new CEO On 1st July 2017 Graham Toy became the Association’s new CEO. Graham will join the NACFB after serving as head of commercial lending at Norwich & Peterborough Building Society. He previously also worked with Barclays and Abbey Commercial, and has spent years working closely with the commercial broker community. The official announcement was made at the Commercial Finance Expo – and you can read all about the day on page 20.

6 | NACFB Magazine

When we set out to define the scope of the research, our aim was not only to provide a snapshot of the PRS and how this key component of UK housing and the economy was likely to trend moving forward, but also to analyse specific issues in more depth, such as the changing tax regime and the impact of the recent affordability changes. We knew that these issues were at the forefront of professional landlords’ and investors’ minds, but the question remained as to how big an impact they would have on the prospects of the PRS, relative to the equally well-publicised challenges of increasing house prices and owner occupied affordability. Will they materially change the investment case for landlords and thereby remove an important supply of housing provision? Is it too simplistic to assume lost landlord supply will be replaced by increased home ownership? The report covers the renaissance of the PRS and its link to the BTL market, the London-centric nature of this industry and the impact of this across the UK, and the effects of the changing tax landscape. We also look at the rise of

the commercial landlord as a result of some of these changes, as well as the broader impact of the tightening of BTL underwriting standards. The report also analyses demographic trends, migration and the knock-on impact of leaving the European Union for the wider housing market. We believe that this type of research provides valuable insight for the broker community and I would encourage you to visit the Shawbrook website where the report is available for download. There is still a job to do with regards to clarifying the impact of these changes and it falls to lenders, brokers and industry bodies such as the NACFB to assume this responsibility. Providing this learning to pockets of the market where an understanding may be lacking will be hugely beneficial in the long run as the various interventions begin to bite. Finally, it’s worth mentioning that our research shows an overarching sense of optimism with many brokers and landlords predicting growth over the remainder of the year. The more we can do now in support of a sustainable future for our market the better, and I am pleased to work with peers and colleagues towards the attainment of this goal.

Dates for your diary Broker Day When: 19th September Where: London, venue TBC Patrons’ Day When: 26th September Where: 280 Bishopsgate, London NACFB and Barcadia Commercial Finance Roadshows When: 17-20th October Where: East, various locations TBC AGM at the Park Plaza When: 30th November Where: Park Plaza Westminster Bridge, London Gala Dinner and Industry Awards When: 30th November Where: Park Plaza Westminster Bridge, London

NACFB Magazine | 7

NACFB NEWS

Notes from our sponsor

An insight into property development

Karen Bennett Managing director of commercial mortgages Shawbrook Bank

orking with the NACFB to promote the importance of education when it comes to the various challenges faced by our industry remains an important goal for Shawbrook.

Key topics that will be discussed: Searching, evaluating and acquiring your site

Learn more and register at https://intermediaries.lendinvest.com

6 | NACFB Magazine

NACFB Magazine | 7

Commercial Finance

ArchOver granted full FCA authorisation

ArchOver has secured full authorisation from the FCA to operate as a P2P lending platform. The platform has facilitated over £35m of investment since launching in September 2014 and hopes authorisation will help to attract new lenders. As an authorised platform, ArchOver can focus on expanding its investor community to achieve its aim of facilitating £500m of lending within the next five years.

Barclays opens London fintech space

Barclays has opened Rise London, which it claims is Europe’s largest co-working space dedicated to fintech. The site in Shoreditch will bring together over 40 fintech companies, including start-ups from around the world, along with Barclays’ corporate clients and other experts to help create the future of financial services. The space will be used for co-creating new products, services and platforms.

Assetz Capital reaches £250m lending milestone Assetz Capital has now lent over £250m to UK businesses since launching four years ago. The alternative finance platform is currently providing secured loans totalling as much as £25m per month to SMEs and housebuilders. Assetz Capital has surpassed the £250m mark after lending more than £55m in 2017 to date.

Housing developer partners with Uber

8 | NACFB Magazine

Two banks roll out 45-minute CRE lending decisions

Timbercreek Asset Management has created an Irish commercial property lending business. The Canadian property investment firm has made €200m (approximately £172m) available to support property investment projects across Ireland. The team will be led by Paul Roddy and will provide loans for office, retail, rental apartments and hotels in Dublin and the regions. A new, automated lending model now allows NatWest and RBS to make commercial real estate lending decisions of up to £2m in just 45 minutes. The process was rolled out nationwide following a successful pilot in Liverpool and London. The new process covers all new applications for up to £2m for commercial and residential investment as well as residential development.

Major bank appoints new property head

Bridging applications increase by 123%

Lloyds Bank Commercial Banking has appointed a new head of property for the North East of England and Yorkshire. Paul Varley will lead one of Lloyds Bank’s largest regional real estate teams, helping its relationship managers to support clients in buying, refinancing and developing commercial and residential investment properties. His appointment follows nearly 30 years of service with the group.

Members of the Association of Short Term Lenders saw a 123% surge in bridging applications in Q1 2017 compared with Q1 2016. The value of applications increased by 13.9% in Q1 2017 compared with Q4 2016, and the amount of loans written were 11.4% higher. The size of the overall loan book was up 45% compared with March 2016.

Property developer Moda Living has partnered with Uber in a bid to reduce car ownership in the UK’s largest cities. Under the proptech partnership, Uber will offer Moda residents - who agree not to have a car parking space within a development - up to £100 of credit per month via the Moda resident app. The move will allow the developer to swap the parking space for amenities such as fitness centres and media rooms.

New commercial property lender launches in Ireland

Close Brothers’ loan book boosted by strong property finance quarter

Close Brothers Group’s banking division has reported a 4.1% yearly rise in its loan book following a strong period of growth in property finance. The loan book stood at £6.7bn as of 30th April 2017, up from £6.2bn at the same time last year. The announcement follows the group’s acquisition of legal sector finance provider Novitas Loans earlier this month.

UK P2P platform signs major agreement with European bank

MFS starts £20m property investment drive

HTB posts first annual profit since relaunch

Hampshire Trust Bank (HTB) has reported its first annual profit since relaunching in 2014. The specialist challenger bank posted a pre-tax profit on continuing activities of £4.4m for the year ended 31st December 2016, up from a loss of £3.1m in 2015. HTB’s property finance loan book more than doubled to £207.5m, while its commercial mortgages division grew its lending to £101.3m. European bank BNI Europa has announced plans to lend £45m each year via P2P finance platform MarketInvoice. The announcement follows a £28.3m trial investment last year, after which the bank has signalled its full confidence in the MarketInvoice proposition. Institutional investment via the platform has almost doubled over the last three years, from £96.1m to £176.2m.

Specialist bank enters northern development market Bridging lender Market Financial Solutions (MFS) has launched a £20m property investment drive for refurbishments. The fund is dedicated to UK investors seeking to support their refurbishments and property turnaround strategies. The move follows a study from MFS, which found that 11.5 million investors consider the next 24 months opportune for a short-term investment strategy.

Together bolsters auction finance offering with EIG partnership

Specialist lender Together has partnered with Essential Information Group (EIG) to launch a portal which provides buyers with property auction information. The new portal will feature information on searching for residential, commercial and semi-commercial property in the auction market, and include hints, tips and case studies on how auction finance works.

FCA agrees fintech partnership with Hong Kong regulator

Liverpool named number one BTL hotspot

Liverpool has been named the UK’s number one BTL hotspot. Analysis from Private Finance found the city offers rental yields of 8% once mortgage costs are taken into account, benefiting from low average house prices and strong rents. Nottingham and Coventry were in second and third place, earning yields of 5.6% and 5.4% respectively. Blackpool, Cardiff and Lincoln were also named in the top 10.

The FCA has entered into a co-operation agreement with the Securities and Futures Commission (SFC) in Hong Kong. Under this new agreement, the FCA and SFC will share information and referrals of innovative firms seeking to enter each other’s respective markets. The FCA now has agreements with a number of key regulators in Hong Kong.

Challenger bank acquires BTL mortgage portfolio for £579m

Paragon Bank has announced the appointment of a new relationship director for development finance. Mick Howard brings 30 years of experience from a variety of banking, development and commercial finance roles, including spells at Bibby Financial Services and, most recently, BLG Development Finance. In his new position, Mick will be responsible for building relationships with developers across the North of England.

Metro Bank plc has purchased a portfolio of UK mortgages for £596.7m from Cerberus European Residential Holdings B.V. According to the challenger bank, the portfolio is made up of around 92% BTL mortgages, with the remainder being owner occupied. The weighted average LTV is approximately 70% with a current expected pay rate of circa 1.6%, principally linked to the Bank of England base rate.

NACFB Magazine | 9

Commercial Finance

ArchOver granted full FCA authorisation

Barclays opens London fintech space

Housing developer partners with Uber

8 | NACFB Magazine

Two banks roll out 45-minute CRE lending decisions

Major bank appoints new property head

Bridging applications increase by 123%

New commercial property lender launches in Ireland

Close Brothers’ loan book boosted by strong property finance quarter

UK P2P platform signs major agreement with European bank

MFS starts £20m property investment drive

HTB posts first annual profit since relaunch

Together bolsters auction finance offering with EIG partnership

FCA agrees fintech partnership with Hong Kong regulator

Liverpool named number one BTL hotspot

Challenger bank acquires BTL mortgage portfolio for £579m

NACFB Magazine | 9

Top | story Our pick of the latest Patron news

PCF Bank to relaunch with enhanced broker offering Private & Commercial Finance Group has announced its relaunch as PCF Bank as it moves towards mobilising as a bank over the coming month. Scott Maybury CEO PCF Bank

he company claims the relaunch will allow it to have a broader and more attractive offering to brokers, as well as to expand its vehicle and asset finance operations. Robert Murray, managing director of PCF Bank, said: “We are delighted that our transition to a bank will allow us to offer enhanced terms to our brokers, at competitive rates which were previously beyond our reach. “We look forward to updating our existing broker contacts on PCF Bank’s new offering, as well as introducing ourselves to those whom we haven’t dealt with before.” Scott Maybury, CEO of PCF Bank, added: “Our business continues to grow organically as our strong network of broker contacts recognises the quality of our work, and it is time to expand that offering.” PCF Bank says it will also be able to offer more attractive rates in the prime segments of the market while maintaining its existing offerings and high standards of service. The process of mobilising the bank will allow the company to take deposits from retail customers, which will in turn reduce the cost of funds for PCF Bank itself and allow it to lend competitively and with enhanced terms, at rates which were previously uneconomic. PCF Bank says that it will remain focused on its core markets of consumer motor and SME asset finance initially, with the intention of scaling up its loan portfolio to £350m over the next three years

and £750m over the next five years. Robert added: “PCF’s extremely strong relationships across our network are a key strength of the company, and have been developed as a result of our high level of very personal service.” Our business philosophy and reputation are very important to us, and we remain focused on our key areas of consumer car finance and SME asset finance where there are significant opportunities for us to increase our market share.” Private & Commercial Finance is a longestablished finance company. The group has been offering asset-backed finance solutions in the vehicle, plant and equipment markets for over 20 years and has supported the broker sector continuously over that period. PCF Bank will be holding launch events for its new products to both its existing network of brokers and new contacts in the coming months. The first event takes place in Leeds on 11th July. As for reasons behind the licence application, Scott highlighted the

reduced dependence the licence will provide on wholesale bank funding. “During the financial crisis, there were a lot of banks cutting back on lending to finance providers, as well as SMEs generally, and so we wanted to secure an alternative source of funding which has the added benefits of coming at a lower cost to us and enabling us to grow our portfolio at a faster rate,” he added. “The banking licence has been two years in the making, and following a successful ‘friends and family’ trial last month, we expect to take our first retail deposits later this month. “The process of becoming a bank is an extremely complex task and has required hard work from all of our staff. We are extremely proud to be achieving this milestone, all without neglecting our dayto-day obligations and compromising our reputation or relationship with brokers. Access to the retail deposit market is transformational for PCF Bank and these are very exciting times.” Associate Lender Association of Bridging Professionals

10 | NACFB Magazine

Helping Fund UK Business

Top | story Our pick of the latest Patron news

10 | NACFB Magazine

Helping Fund UK Business

Introducing New and refreshed offerings for NACFB brokers on behalf of Patrons and Members

Just Cashflow launches highly flexible loan product Specialist lender Just Cashflow has announced the launch of Business Builder - a new loan product with enhanced tailoring capabilities for all business needs. John Davies Director Just Cashflow PLC

he new structure provides brokers and intermediaries with the ability to work with clients to design the loan product that best suits their business needs and growth plans. The product suits both short- and long-term loan requirements with fixed or variable repayments and with access to funds from £10,000 to £500,000. Because of its malleable nature, features such as payment holidays, early repayment without penalties or loan extensions can be worked into the design. Use of funds can range between anything from a new vehicle or printing press to a new lease or shop. It also provides borrowers with certainty about the term of the loan and knowing the structure of future monthly repayments. The product comes in addition to the lender’s existing revolving credit facility, which acts exactly like a traditional bank overdraft. John Davies,

director at Just Cashflow, provided some further details on the product: “We appreciate that businesses have different finance needs that reflect their growth plans, [such as] seasonality of income and a range of other factors.

facility works really well when businesses have to prepare for inevitable bumps in the road that will impact their all-important cash flow. However, this isn’t always the ideal solution when capital expenditure needs to be made.

“This has driven the creation of our new product, along with recognition that professional brokers and intermediaries are ideally-placed to work with their business customers to design the most suitable loan facility.

“Seasonality of income was another strong theme. A lot of businesses know how this is going to impact them and would welcome the flexibility and relief that payment holidays can provide.

“We have taken on board feedback from existing customers and the brokers we regularly deal with. A strong theme has been that our revolving credit

“Businesses rely on the expertise of professional brokers and intermediaries, and our flexible financial solutions will allow them to work with their clients to provide a tailored product. “The most successful businesses are ones that can quickly adapt to new challenges and opportunities, and our thinking is that our finance facilities should reflect and encourage this. “For example, if things change and a business has the ability to repay their loan early, why should they be penalised for it?”

We have taken on board feedback from existing customers and the brokers we regularly deal with

How additional funding can help successful businesses grow Did you know it’s not the fastest, the quickest or the fittest that survive in business? It’s those that are most adaptable. Businesses need to make sure they have adaptability built in to their plans and part of this is making sure they have got the funding in place to support those adaptable plans. If brokers and intermediaries can help their clients embrace and prepare for change, then they will be ready to adapt when they need to and stand a much better chance of success. Here is a case study of a business that has done just that. Drewitts Events Limited have turned an opportunity into a thriving successful family business. This is how they did it. The Drewitt family are now in their third generation as entertainers with Pauline and Tony Drewitt now running the business and involving their four children. Tony found a derelict horse bus in 1973 and set about restoring it. A big break came in 1979

Drewitts Events was recently provided the opportunity of a restoration project. The project involved restoring a 1911 carriage, the last horse drawn London Omnibus to be built. Successful completion of the project meant that the carriage would take part in the Lord Mayor’s Parade in London in November 2017, taking the carriage back to the Mansion House it would have visited in 1911. In order to facilitate this project additional funds were required by the business to purchase materials, parts and other equipment to be able

Tony Drewitt approached Just Cashflow about the Revolving Cash Fund. Because it works in a similar way to an overdraft facility it meant that Tony had the comfort of knowing he had funds available as and when he need it. This enabled him to proceed with his restoration project, knowing that should a specialist part or service be required, he would have the funds immediately available to proceed. Of Just Cashflow, Tony says “It was very simple and straightforward”. He went on to say “the experience was like speaking with your old fashioned bank manager, in that they took the time to really understand my business needs and requirements”. www.drewitts-events.com The team at Just Cashflow know it is important to provide fast and flexible funding for their customers and with a bit of foresight and planning, businesses can prepare themselves for growth and success by ensuring they have funding available to grab opportunities as and when they arise. The team at Just Cashflow know it is important to provide fast and flexible funding for their customers to ensure that everyone is able to unlock more deals for business growth and success.

The final piece in the puzzle - a loan you can design yourself As a professional broker or intermediary you’ll be used to seeking fast and flexible funding for your clients. Just Cashflow knows that every business is different and our new loan products enable us to offer you tailored financial solutions to meet the requirements of your clients. Now you can design a loan with your Client that can give them access to funds from £10,000 to £500,000 in a way that exactly fits with their business needs. Blend a short term and long term loan, pay it off without penalties, add in a payment holiday - a Just Cashflow loan can do it all. The application process is really simple and straightforward and our underwriting team will support you and help you complete the picture for your clients.

Just call us now

Alternatively, find out more

0121 418 5037

justcashflow.com/partner

FS668057

12 | NACFB Magazine

when the restored bus was booked to appear in the 150th birthday parade in Hyde Park, London. The bus worked that summer transporting passengers from Baker Street Underground Station to The London Zoo. Since the summer of 1979 a great deal of work has been done with the bus and it has reached its 30th appearance in The Lord Mayors Show in the City of London. Other carriages have been added to the collection of bygones including a hearse, wedding carriage and two magnificent horse drawn fire engines.

to do a magnificent job fit for the occasion. Not only was there a time critical element, but having the carriage ready in time would mean a fantastic marketing opportunity for their business.

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB, under Company number 08508165 © Just Cash Flow PLC 2017

Introducing New and refreshed offerings for NACFB brokers on behalf of Patrons and Members

“Seasonality of income was another strong theme. A lot of businesses know how this is going to impact them and would welcome the flexibility and relief that payment holidays can provide.

“We have taken on board feedback from existing customers and the brokers we regularly deal with. A strong theme has been that our revolving credit

We have taken on board feedback from existing customers and the brokers we regularly deal with

Just call us now

Alternatively, find out more

0121 418 5037

justcashflow.com/partner

FS668057

12 | NACFB Magazine

to do a magnificent job fit for the occasion. Not only was there a time critical element, but having the carriage ready in time would mean a fantastic marketing opportunity for their business.

BCMS668054

Just Cash Flow PLC is registered at 1 Charterhouse Mews, Farringdon, London EC1M 6BB, under Company number 08508165 © Just Cash Flow PLC 2017

Case Studies

Market Financial Solutions Bridging with finesse

Completion highlights from a selection of our Patrons and Members

Equity bridge supports digital advertising business growth In May 2017, Capital Step completed an investment in Londonbased Admedo, a high-growth ad tech business, specialising in the automated purchasing of targeted digital advertising. Rael Sarembock Co-founder Capital Step

dmedo has achieved impressive recent growth, having developed a custom-built platform that allows digital media buyers to manage multiple advertising exchanges through a single, highly customisable interface. Further to the significant investment in its platform to date, Admedo approached Capital Step in search of additional liquidity to support and accelerate the business’s growth trajectory beyond cash flow breakeven.

Once heads of terms were agreed, Capital Step moved quickly to define a focused due diligence scope of work. A phased approach ensured that any issues could be flagged immediately, providing transparency and efficiency at all times. Commercial, financial and legal diligence was completed within approximately three weeks, with final terms agreed shortly thereafter. Capital Step’s standardised documentation helped facilitate a smooth investment process, managing to meet the timing challenges initially presented. The Admedo transaction represents what we term an equity bridge investment, whereby companies use

...Companies use our non-dilutive capital solution to avoid raising expensive equity at a relatively low valuation today In many of the funding opportunities presented, there is often limited capacity for traditional debt, or additional debt, in the capital structure of an SME. This may be a result of low/negative profitability or asset-light balance sheets. The equity capital alternative is extremely expensive for founders and shareholders, especially in highgrowth companies, while investment processes can take months to complete – even where existing venture capital or private equity backers are involved.

This alignment of interests with owner-managers represents one of the core pillars of the Capital Step investment thesis. Capital Step’s funding will allow Admedo to continue to invest in business development through the rollout of its platform to a growing and increasingly high-profile client base.

he timeframes achieved in completing the transaction further reinforce Capital Step’s

Nick Moutter, founder and CEO of Admedo, said: “Admedo are excited to be partnering with Capital Step; the model used is extremely innovative in the market and allows companies like Admedo to grow through cash injection and without cap table dilution. Equity is becoming more and more expensive for companies like us, so to have other options, such as royalty finance, really benefits founders and existing shareholders.” Jonathan Schneider, co-founder of Capital Step, added: “We are thrilled to be supporting a dynamic entrepreneur in Nick as he and the Admedo team continue to grow their exciting and disruptive business. The company’s emphasis on transparency and a great user experience resonates strongly with us at Capital Step, while our nondilutive solution means that existing shareholders maintain economic and strategic control. We look forward to an exciting new partnership.” As both the team and portfolio of Capital Step continue to grow, we’re increasingly focused on a wide variety of deals across a host of sectors, including management buy-outs/ buy-ins, various growth capital opportunities and acquisition financing. We continue to work closely with a host of debt and equity funding partners as well as brokers, corporate finance advisors and a variety of professional services, often acting as a non-dilutive alternative where funding gaps exist due to insufficient debt availability.

Expertise

in assisting clients seamlessly

Transparency from the outset

Simplicity

Speed

of application process

in providing a decision

Flexibility

Efficiency

tailored to the client

get things done fast

CONTACT A MEMBER OF THE MFS TEAM TO FIND OUT HOW WE CAN SUPPORT YOUR BRIDGING STRATEGY

T: 020 7060 1234 | E: info@mfsuk.com | W: mfsuk.com Berkeley Square House, Berkeley Square, Mayfair, London W1J 6BD, United Kingdom

Associate Lender

In this example, Admedo also required a decision within weeks in order to capitalise on some of the significant near-term growth opportunities available.

our non-dilutive capital solution to avoid raising expensive equity at a relatively low valuation today. As a result, any subsequent increase in the business’s equity value accrues, in full, to the existing shareholders.

ability to move quickly and work efficiently. In conjunction with a co-operative and motivated management team, the process was executed on time and as planned.

WE PROVIDE SOLUTIONS FOR OUR CLIENTS THAT ARE FAST, FLEXIBLE AND EFFICIENT

Association of Bridging Professionals

14 | NACFB Magazine

Case Studies

Market Financial Solutions Bridging with finesse

Completion highlights from a selection of our Patrons and Members

he timeframes achieved in completing the transaction further reinforce Capital Step’s

Expertise

in assisting clients seamlessly

Transparency from the outset

Simplicity

Speed

of application process

in providing a decision

Flexibility

Efficiency

tailored to the client

get things done fast

CONTACT A MEMBER OF THE MFS TEAM TO FIND OUT HOW WE CAN SUPPORT YOUR BRIDGING STRATEGY

T: 020 7060 1234 | E: info@mfsuk.com | W: mfsuk.com Berkeley Square House, Berkeley Square, Mayfair, London W1J 6BD, United Kingdom

Associate Lender

In this example, Admedo also required a decision within weeks in order to capitalise on some of the significant near-term growth opportunities available.

ability to move quickly and work efficiently. In conjunction with a co-operative and motivated management team, the process was executed on time and as planned.

WE PROVIDE SOLUTIONS FOR OUR CLIENTS THAT ARE FAST, FLEXIBLE AND EFFICIENT

Association of Bridging Professionals

14 | NACFB Magazine

CASE STUDIES

Future plans

Mixed-use repurposing helps revive derelict hotel In a market where new lenders arrive as swiftly as they depart, there is increasing need for quality from brokers and borrowers alike. Dominic Gibson Fund manager Octopus Property

ery few lenders can genuinely provide the speed, certainty and flexibility that clients need and this is perhaps more acute in commercial lending than any other part of the market. The reasons are multi-faceted but the consistent challenges in commercial lending can be distilled down to transaction timelines, borrower structure and asset complexity. Since entering the market in 2009, Octopus Property, formerly Dragonfly Property Finance, has built its reputation on directly addressing this trifecta of challenges and consistently delivering for its borrowers.

16 | NACFB Magazine

A recent example of this came when one of our long-standing introducers brought us an urgent requirement for acquisition bridge funding on a derelict city centre hotel. The borrower had secured a purchase option on the site before successfully obtaining planning consent for the development of a mixeduse commercial scheme. He had previously extended the purchase

option to allow for planning delays but was faced with a two-week completion deadline and substantial additional option fees. In order to hit the required timeline, Octopus Property had to fully understand both the asset and the borrower. As with all of our commercial loans, we invited the broker and his client to meet the team and discuss the loan in detail, because there’s no one

We needed to understand the borrower’s relationship with the vendor and get comfortable with the overseas special purchase vehicle structure

The derelict city centre hotel

better versed in their own scheme or structure than borrowers themselves. We place huge importance on understanding our borrowers and their structures for both risk mitigation and regulatory reasons. We lend to a huge variety of structures but always ensure that the ultimate beneficiary has robust experience or a strong professional team around them. Having developed a variety of high-quality branded hotels across the UK and borrowed from Octopus Property on two previous occasions, we knew that, in this case, the borrower had both. Regardless of our previous loans, we needed to understand the borrower’s relationship with the vendor and get comfortable with the overseas special purchase vehicle structure. We also wanted to establish how much equity the borrower had invested when securing both the purchase option

and the planning consent. Having evidenced the project expenditure to date, we were able to include these costs in our assessment of the purchase price and increase our loan accordingly.

rom the moment we received the enquiry it was clear that the borrower had identified an exceptional opportunity and achieved an extremely valuable planning consent (circa £55.9m GDV) for the development of a branded 131-bed hotel and 66 further residential units which would benefit from use of the leisure, restaurant and retail offerings. With the benefit of our commercial team being run by experienced chartered surveyors, who have total discretion over our funds and our flexible lending parameters, we were able to assess the deliverability of the scheme, confirm the appropriate

valuation methodology and understand the depth of market demand that would provide the future exit to our loan. Our site inspection confirmed the initial understanding of the asset and the micro market, so when the independent valuation report came in it made for a swift review and approval, enabling us to focus on the wider underwriting process and move rapidly towards completion. In line with our day one commitment to the borrower, the loan completed with time in hand, highlighting the value of partnering with a lender who can offer speed, certainty and flexibility in all that it does.

NACFB Magazine | 17

CASE STUDIES

Future plans

16 | NACFB Magazine

We needed to understand the borrower’s relationship with the vendor and get comfortable with the overseas special purchase vehicle structure

The derelict city centre hotel

and the planning consent. Having evidenced the project expenditure to date, we were able to include these costs in our assessment of the purchase price and increase our loan accordingly.

NACFB Magazine | 17

CASE STUDIES

To make it easier for the broker ... the underwriting team took on the responsibility of scanning and linking all the relevant documents

Seven limited company buy-to-lets, three locations Bob Young CEO Fleet Mortgages

he taxation and regulatory changes around the buy-to-let mortgage market have meant that landlords (and their advisers) have sought out limited company vehicles in order to shield themselves from some of the greater costs involved. Recent research from Moneyfacts showed just how far the limited company buy-to-let sector has progressed with 313 limited company products available today, up from 133 this time last year. As a specialist buy-to-let lender, we have been (and remain) highly active in the limited company sector, not only in terms of those landlord borrowers purchasing new properties through special purpose vehicles, but also those moving properties held in their individual names into limited companies. One recent case we completed brings together aspects of limited company lending coupled with the needs of portfolio landlords as they seek to refinance. This particular landlord had over 10 properties within his limited company but was only seeking refinance across seven, having previously moved these into the company from his individual name. All of the seven properties the landlord wanted to refinance were based in

18 | NACFB Magazine

three different locations, and all were in purpose-built complexes. These flats were both one- and two-beds and the company was seeking to raise equity in order to put deposits down on other properties. The company had been established in 2012 following the sale of a highvalue, single-occupancy property which had only a 2% yield. Following the sale, the company was established off the proceeds in order to buy lower-cost apartments that offered a better rental yield – between 4-5%. What made this case unique was the fact that three units were in the same block of flats, two in another, and a further two in yet another. Indeed, the complexity was heightened slightly by the fact that one of these units was a large block of flats (up to 10 storeys) and was inside the M25.

imited company buy-to-let is part of our core offering; however, there were a couple of issues to be resolved with this case. First was the exposure levels for us as a lender in terms of both loans and multiple postcodes. Our criteria allows us to lend up to 20% of the units in the block, and as the company was refinancing multiple flats in the same building, this process would take some time to validate. Our underwriters overcame this hurdle by reviewing all the valuation reports at the same time, allowing them to develop an informed view of the whole picture when it came to build an offer that met the client’s requirements.

FLEXIBLE BRIDGING LOANS FOR PROPERTY PROFESSIONALS

Second, as the loan was over £1m, it also had to go to our credit committee. To prevent any unnecessary delay, the case was reviewed by the team leader to ensure all necessary documents and validation had been correctly completed. This attention to detail ensured that the offer was signed off by our credit committee within 24 hours. To make it easier for the broker, they were only asked to submit the documents once, and the underwriting team took on the responsibility of scanning and linking all the relevant documents to each property that formed part of the offer. Third, we needed to vet all the individual applicants and the company to check they had sufficient landlord experience – not a problem in this case, given the number of properties within the company. Additionally, we required a strong credit score and specific SIC codes for the company. We have very experienced underwriting staff who were able to handle this case and its complexities right the way through the process and, by the end, we were happy to provide the £1.5m required by the limited company. This goes to show that, even with cases somewhat removed from the norm, advisers should be confident in the ability of a specialist like Fleet Mortgages to work the case and provide the right result for all concerned.

Business Products Innovation of the Year

CASE STUDIES

To make it easier for the broker ... the underwriting team took on the responsibility of scanning and linking all the relevant documents

Seven limited company buy-to-lets, three locations Bob Young CEO Fleet Mortgages

18 | NACFB Magazine

FLEXIBLE BRIDGING LOANS FOR PROPERTY PROFESSIONALS

Business Products Innovation of the Year

Cover Story | feature An overview of the Association’s most successful CFExpo to date

CFE 2017: Another year of breaking records

The 8th Commercial Finance Expo took place on 21st June at a new, larger venue in the NEC in Birmingham, demonstrating skyrocketing interest in the commercial finance sector and the continued, inexorable rise of alternative players.

ith a record number of 127 exhibitors and over 1,600 attendees, the Expo again broke all records compared with last year’s event. Due to the rise in interest, the event was moved to a larger venue – Hall 3a – to make space for all interested parties. With stalls ranging from traditional to extravagant, lenders from all over the UK came together to demonstrate their offerings to attending brokers, investors and other finance professionals. Exhibitors included a wide range of firms, from high street banks through P2P lenders to smaller, niche players. The NACFB began the day with several important news updates, including the

20 | NACFB Magazine

formal announcement of the appointment of its new CEO, Graham Toy, who joined on 1st July. The Association also provided an in-depth update on its road map, setting out future goals for the rest of 2017 and 2018, which include a full code of practice review and further enhancing the NACFB to continue to raise and uphold professional standards. The NACFB confirmed it currently works with 137 Patron firms and over 800 Member firms. The Association currently also has over 40 applications for membership in the pipeline. Norman Chambers, managing director, highlighted the value placed on longevity and stability from Members and Patrons, adding: “We are not afraid to make big decisions to enhance the NACFB.”

Norman also highlighted the Association’s strong focus on fee earners, or registered individuals, within Member firms to ensure membership fees are transparent across the board. An update on compliance from Roger Deane, MD of NACFB Compliance Services, revealed that nearly 450 Member visits have been completed to date, with highly successful results. All firms visited so far were found to be operating within their permissions, and all those currently not meeting a standard have demonstrated action plans to resolve this. As a result of the follow-ups, 90% of companies visited have taken action to meet requirements.

Following the Association’s update, the day saw several Patron panels debating the current, key issues of commercial finance, including Brexit, the buy-to-let sector, what makes specialist lending special as well as meeting professional standards for businesses. At the Meet the Experts stage, audiences were introduced to a wide variety of offerings from Patrons and governmental bodies alike, including Kuflink Bridging, the British Business Bank, Capital Step and the Department of International Trade. Exhibitors and attendees were conducting business from 9.30 am to 4.30 pm.

NACFB Magazine | 21

Cover Story | feature An overview of the Association’s most successful CFExpo to date

CFE 2017: Another year of breaking records

20 | NACFB Magazine

NACFB Magazine | 21

COVER STORY

“The fact my colleagues rapidly had to replenish their stock of business cards is testament to the fact that the Commercial Finance Expo is the show that people clearly come to do business at.

“Despite the heat and the busyness of the event it’s been a fantastic day today. We’ve had record numbers over at our stand, lots of interest in our platform and our sponsorship of Lendy Cowes Week as well. We’ve had some really, really interesting conversations with brokers and some investors actually, who were quite interested in what we do.

“It was a great opportunity to put faces to names and make new business contacts - easily the most productive show of the year.

“This event is the big one for the year it’s the one to be at, the one to be seen at and we’ve thoroughly enjoyed it. We’ve had a great time and it’s gone quickly. We’ve met lots of good competitors here as well – there’s a great inter-team dynamic which is good. We’ve really enjoyed it, so thank you to the NACFB.”

“It was good to see strong interest in our new product (launching in early July) and to have the opportunity to explain, first hand, how it’s designed to help build businesses.” John Davies Director, Just Cashflow “The new venue at the NEC was impressive, with better facilities, and from the feedback we got on the stand the move was well-received by exhibitors and attendees.

“On behalf of the Shawbrook commercial team, I’d like to extend my congratulations to the NACFB for hosting yet another hugely successful Commercial Finance Expo.”

“We had an excellent show. Our stand attracted a steady stream of brokers and it was clear that neither the change in venue nor the hot weather had deterred what looked like an even bigger attendance than last year. We chose the NACFB Expo specifically to announce our new range of P2P products and were pleased by the positive response from brokers after our seminar session and on the stand during the day.

Karen Bennett Director of commercial mortgages, Shawbrook Bank

“It was a very successful day, bigger and better than last year. I think, for us, there was a lot of interest in our product which I think will have a lot of good follow-up business. We’re very pleased and congratulations to the NACFB on a great conference.” Rael Sarembock Co-founder, Capital Step

22 | NACFB Magazine

“Funding Circle thoroughly enjoyed exhibiting at the NACFB’s Commercial Finance Expo in Birmingham this year. The venue and event itself provided a lively environment for collaboration with lots of new and familiar faces from the introducer community. “My panel on specialist lenders was a personal highlight. Funding Circle was set up in 2010 at a time when small businesses were suffering a crisis of access to finance. The panel gave me a great platform to talk directly to a crowd of introducers about how we’re able to fill the funding gap to support their clients’ ambitions.”

“Thanks to the weather, our ice cream stand did brisk business and we were delighted that the Kuflink message found favour with such a knowledgeable and interested audience.” Narinder Khattoare Director, Kuflink Bridging

Paul Riddell Head of marketing & communications, Lendy

Tom Shave BDM, Funding Circle

“Today has been, from our point of view, a good investment of time. We’ve met a lot of new contacts that could potentially turn into some good business opportunities and also reacquainted ourselves with lots of contacts that we’ve known.”

Lee Gilmore BDM, Bridging Finance Solutions

“All of the team from Together who attended the Commercial Finance Expo really enjoyed the event. The exhibition was excellent and it was great to see so many brokers and lenders coming together to share their knowledge and insights at the conference, with some really interesting debates.” Marc Goldberg Commercial CEO, Together

NACFB Magazine | 23

COVER STORY

“The fact my colleagues rapidly had to replenish their stock of business cards is testament to the fact that the Commercial Finance Expo is the show that people clearly come to do business at.

“It was a great opportunity to put faces to names and make new business contacts - easily the most productive show of the year.

“On behalf of the Shawbrook commercial team, I’d like to extend my congratulations to the NACFB for hosting yet another hugely successful Commercial Finance Expo.”

Karen Bennett Director of commercial mortgages, Shawbrook Bank

22 | NACFB Magazine

Paul Riddell Head of marketing & communications, Lendy

Tom Shave BDM, Funding Circle

Lee Gilmore BDM, Bridging Finance Solutions

NACFB Magazine | 23

THE TEAM FOR COMMERCIAL LOANS

COVER STORY

WE C

COMMERCIAL

RETAIL

INDUSTRIAL

SHOPS

AST’S

INVESTMENT

RESIDENTIAL

HOTELS

OFFICES

FACTORIES

OWNER OCCUPIERS

INVESTORS

ALL!

“The day has been really good. We’ve met quite a few good prospective brokers, and the whole event has been organised really well.” Tiba Raja Market Financial Solutions

CMY

Let’s Talk! COM M ERCIAL

24 | NACFB Magazine

•

020 8349 5190 finance@alternativebridging.co.uk @ABC_Bridging

RESIDENT I AL

•

A PRINCIPAL LENDER

DEVELOP ME N T

THE TEAM FOR COMMERCIAL LOANS

COVER STORY

WE C

COMMERCIAL

RETAIL

INDUSTRIAL

SHOPS

AST’S

INVESTMENT

RESIDENTIAL

HOTELS

OFFICES

FACTORIES

OWNER OCCUPIERS

INVESTORS

ALL!

“The day has been really good. We’ve met quite a few good prospective brokers, and the whole event has been organised really well.” Tiba Raja Market Financial Solutions

CMY

Let’s Talk! COM M ERCIAL

24 | NACFB Magazine

•

020 8349 5190 finance@alternativebridging.co.uk @ABC_Bridging

RESIDENT I AL

•

A PRINCIPAL LENDER

DEVELOP ME N T

Patron | profile

Kuflink Bridging From fringe to mainstream Narinder Khattoare Sales & marketing director Kuflink Bridging

Kuflink Bridging is an award-winning, thriving and forward-thinking company, fully regulated to transact short-term lending in the regulated and unregulated spheres. But the story of our rise from fringe player to mainstream provider started just six years ago. 26 | NACFB Magazine

aunched as Alpha Bridging Solutions in 2011, the business was headquartered in Gravesend, Kent, as it still is today – though the company moved to larger, purposebuilt premises in 2016 to accommodate growing numbers of team members and its P2P platform, Kuflink. Having previously lent against luxury items and property, Alpha only moved into exclusively lending against property in 2013. It had become clear that lending against luxury assets, while attractive as an alternative to bricks and mortar, would require particularly large resources to enable us to persuade intermediaries to use what to them and their clients was a largely unknown method of raising capital. However, it was clear that while there was a growing number of lenders

in the bridging space, there was definitely room for another lender dedicated to the broker market, able to deliver the right solutions in a timeframe that suited the client and their circumstances.

minister Stephen Hammond and local MP Adam Holloway and attended by over 60 guests. We also became fully authorised that year, to add to the unregulated bridging offering we have had since inception.

As a relatively unknown brand, we had already developed a strong business stream, lending from our own, private resources based on personal service and delivering funds quickly and efficiently. Our reputation as a lender which got things done and was able to quickly handle cases which bigger players would consider, confer on, think about, waste time with and then reject, began to attract new support.

The change of name to Kuflink Bridging took place in 2016, along with a move to larger premises in Gravesend, opened by treasury

he last 18 months have seen the arrival of Tarlochan Garcha as CEO in October 2015 following a 17-year career in banking with NatWest and Barclays. His remit was to develop systems and controls and to oversee applications to the FCA for both Kuflink Bridging and also for our new P2P platform, Kuflink. It had become clear to us that we didn’t want to be reliant on just one source of funding and we soft-launched our new P2P proposition in August 2016, as we aimed to bed in our systems and take on new staff. At the same time,

we applied for full authorisation from the FCA for the P2P platform, which we obtained just eight months after our initial application. Kuflink is now one of only a handful of P2P platforms in the property sector to be fully authorised and regulated by the FCA. One of our key USPs for P2P investors is that on our SelectInvest product, Kuflink Bridging takes the initial 20% in each deal onto our own balance sheet, thereby providing investors with a measure of security that is unparalleled in the P2P space. We are the only P2P lender in the UK property arena that does this. We therefore now have a highly effective and complementary source of funding for our short-term lending proposition via Kuflink Bridging. We are not at the mercy of corporate

funders whose commitment to the market wavered, as we saw, after the Brexit vote. Not only is Kuflink Bridging able to provide a solid platform for consistent, competitive lending facilities to the broker market, but Kuflink’s P2P proposition provides ordinary investors with the opportunity for strong returns (up to 7.2% gross per annum), backed up by the best safeguards in the industry. We have plenty more projects in the pipeline, but the core strategy is to provide bridging facilities that are accessible, good value for money and delivered on time, every time. Our aim is to be a top player in the bridging market and, so far, we are right on course.

NACFB Magazine | 27

Patron | profile

Kuflink Bridging From fringe to mainstream Narinder Khattoare Sales & marketing director Kuflink Bridging

in the bridging space, there was definitely room for another lender dedicated to the broker market, able to deliver the right solutions in a timeframe that suited the client and their circumstances.

minister Stephen Hammond and local MP Adam Holloway and attended by over 60 guests. We also became fully authorised that year, to add to the unregulated bridging offering we have had since inception.

The change of name to Kuflink Bridging took place in 2016, along with a move to larger premises in Gravesend, opened by treasury

NACFB Magazine | 27

Ask | the expert Answers and help from among the most knowledgeable of NACFB associates

The truth about personal contract purchase Graham Hill, director at the NACFB, clears up the confusion surrounding PCP agreements

ver the past few weeks, the press has been alive with vehicle finance stories following the announcement that an investigation was to be carried out by the FCA into the misselling of vehicle finance and, in particular, personal contract purchase agreements (PCP). As a result, I have been commenting, on behalf of the NACFB, in national newspapers and trade journals – from the FT and Mail through to Mail Online and AutoExpress. Following an interview with Reuters, my comments have now been read as far afield as Malaysia and India – the NACFB goes global. Sadly, most of what is being reported is total bunkum. Several journalists have compared PCPs with sub-prime lending, suggesting that those taking out PCP agreements can ill afford the payments, creating a financial bubble about to burst – as happened with mortgages in 2008. So, I intend to put the record straight and answer questions that may arise when one is thinking of taking out a PCP agreement or is currently under such a contract. Incidentally, don’t come to me for a PCP. As a broker, I concentrate on personal contract hire (PCH) – a better and invariably cheaper product.

Q A

Is PCP available to those with poor credit?

Definitely not. The funder, normally the manufacturer’s own finance arm, takes a relatively small deposit and

28 | NACFB Magazine

can charge as little as £250 per month for a £25,000 motor car. With that level of extreme exposure by the leasing company, if you think you don’t have to be totally squeaky clean to be approved for finance, you must think the lender is nuts. It simply doesn’t make commercial sense. So no, PCP is not for the credit-challenged.

Q A

Is it a good product?

Yes it is. With over 85% of new cars financed by consumers on PCPs, it is clearly a hit with those who may only have been able to drive a two- or three-year-old car for the same down payment and monthly repayment. As more people drive new cars the environment improves, drivers enjoy lower running costs, better MPG and the great feeling of driving a brand new car.

Q A

What are the catches?

Sadly, the profit motive has taken over in many dealerships with very little regard to their FCA obligations, hence the reason for an investigation. Dealers are under pressure to sell more new cars by the manufacturer - and to sell them on finance, earning them more profit out of each customer. Take a guess as to which finance product earns most profit? Indeed, it’s PCP. First, make sure you are indeed signing a PCP agreement. There has been a lot of concern over hire purchase agreements with a balloon payment being sold as PCP. The big difference here is that you must pay the

final balloon payment, and have no right to return the car at the end of the agreement. It means the customer takes the risk in the final balloon payment, not the lender. Moneysavingexpert.com has revealed that 80% of all cars on PCP are returned at the end of the agreement but many are still taking out a PCP rather than a cheaper PCH because it gives you the option to buy the vehicle, which PCH doesn’t. They then give the car back anyway while paying more per month – daft! Giving the car back can present another set of challenges. First, there are endof-lease charges which I don’t think are always unfair. Excess over the contracted mileage results in the car now being worth less than expected – not unreasonable. Repairing dents may be a cost to you but had you owned the car and part exchanged it, the dealer would have knocked money off his offer – same difference. Finally, there are the unforeseen extra charges. For example, if you can’t find the spare key that came with the car you will be charged for a replacement. This can cost up to £600. Missing service history, not having the car serviced on time or at a main dealer can result in charges. Even a missing wheel lock nut can end up costing £30. So, for those considering a PCP: do some research, know exactly what you are signing and shop around. Most of all, be realistic about annual mileage and take care of the car.

Faster, simpler short term lending You can now get a quote in under 60 seconds and an offer in 2 minutes.

om r f s Rate

% 5 6 0.

Call us on 0161 933 7103 or visit togethermoney.com/

This advertisement is intended for professional intermediary use only and must not be distributed to potential clients.

Ask | the expert Answers and help from among the most knowledgeable of NACFB associates

The truth about personal contract purchase Graham Hill, director at the NACFB, clears up the confusion surrounding PCP agreements

Q A

Is PCP available to those with poor credit?

Definitely not. The funder, normally the manufacturer’s own finance arm, takes a relatively small deposit and

28 | NACFB Magazine

Q A

Is it a good product?

Q A

What are the catches?

Faster, simpler short term lending You can now get a quote in under 60 seconds and an offer in 2 minutes.

om r f s Rate

% 5 6 0.

Call us on 0161 933 7103 or visit togethermoney.com/

This advertisement is intended for professional intermediary use only and must not be distributed to potential clients.

Spotlight Unmissable industry coverage

Bridging & Commercial Awards 2017 The 2017 Bridging & Commercial Awards once again honoured the outstanding achievers in the bridging, commercial and development finance sectors. The event – sponsored by Titlesolv – was once again held at the Hurlingham Club in Fulham on 8th June. Hosted by Mo Mulki, CEO and Caron Schreuder, managing director of Medianett, as well as Beth Fisher, editor of Bridging & Commercial, 620 guests attended to celebrate the industry’s finest.

Sponsors Together and Precise Mortgages supported the post-event drinks by arranging the post-awards bar and after party respectively. Meanwhile, Wonka bars containing three hidden golden tickets were handed to lucky guests, with prizes donated by Kuflink. Rosetrees were the charitable beneficiary for the event, in association with development finance lender Regentsmead.

With this year’s theme centring on Willy Wonka and the Chocolate Factory, the venue was transformed into a giant chocolate factory – complete with Oompa-Loompas. 22 prestigious awards were handed out to the winning nominees, with Together claiming both the bridging and commercial lender of the year awards.

Best Commercial Broker Winner: Watts Commercial Finance Highly Commended: Enness Private Clients

Service Excellence Award – Brokers Winner: Adapt Finance Highly Commended: Enness Private Clients

Commercial Lender of the Year Winner: Together Highly Commended: Shawbrook

Best Bridging Partner Winner: Lightfoots Solicitors Highly Commended: Robert Sterling Surveyors

Specialist Bank of the Year Winner: Shawbrook Bank Highly Commended: Charter Savings Bank

Regulated Lender of the Year Winner: Precise Mortgages Highly Commended: Masthaven

Best Bridging Lender Newcomer Winner: Avamore Capital Highly Commended: Ashley Finance

Best Development Broker Winner: Crystal Specialist Finance Highly Commended: Adapt Finance

Marketing Campaign of the Year Winner: Masthaven Highly Commended: Hope Capital

Bridging Lender of the Year Winner: Together Highly Commended: Precise Mortgages and Octopus Property

Best Use of Fintech Winner: Shawbrook Bank Highly Commended: Together

Underwriter of the Year Winner: Eddie Boakye – Funding 365 Highly Commended: Claire Wasbrough – Masthaven

Development Lender of the Year Winner: Octopus Property Highly Commended: Amicus Property Finance

Personality of the Year Winner: Richard Deacon – Masthaven

Best Bridging Broker Winner: Pure Commercial Finance Highly Commended: Adapt Finance

Best Specialist Distributor Winner: Brightstar Highly Commended: Crystal Specialist Finance

Alternative Lender of the Year Winner: LendInvest Highly Commended: Lendy

Specialist Product of the Year Winner: Ortus Secured Finance – NI product range Highly Commended: Castle Trust – Flex mortgage

Lender Relationship Manager of the Year Winner: Sundeep Patel – Precise Mortgages Highly Commended: Dawn Trustam – Funding 365

Service Excellence Award – Lenders Winner: Precise Mortgages Highly Commended: Roma Finance

30 | NACFB Magazine

Outstanding Contribution – Individual Winner: Jonathan Newman – Brightstone Law Outstanding Contribution – Company Winner: Together

NACFB Magazine | 31