NACFB Magazine - November 2017

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Issue 52 November 2017

The magazine for the National Association of Commercial Finance Brokers

Commercial temperatures rise

The speedy recovery of the UK property market since the referendum

In this issue

Is age an issue?

The impact of increasing life expectancy on finance

GDPR

What you need to know now

Offshore lending

Recent trends in borrowing from outside the UK

2

LOGO

P RO P E RT Y F I N A N C E D I V I S I O N | CO M M E RC I A L | S P E C I A L I S T BT L | CO M M E RC I A L I N V E S T M E N T | S T L & R E F U R B | T R A D I N G B U S I N E S S

SPECIALISTS IN GOOD SENSE

REGULAR SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

n

Short Term lending from 0.55%

n

Term lending from 2.99% above 3 month LIBOR*

n

Ltd companies, LLPs & Individuals

n

Broad range of security including HMOs & multi-lets

O

ver the last two months, I have led a series of Members’ and Patrons’ days in London to connect with those who are integral to making the NACFB what it is – and what an illuminating set of days they were. These were the first NACFB events that I attended without my ‘Patron hat’ on.

NACFB News 4-8 8 9

In the news Dates for your diary Notes from our sponsor

Top Story

You will have seen the Members’ day write-up in last month’s magazine and you can also see an overview of the Patrons’ day in this issue (page 46). One topic that came up repeatedly was that of engagement.

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

The drive for better engagement seems to exist in all forms of modern life, but in our world and within your Association, increasing engagement with you – our Members – is right at the top of my to-do list. This drive to communicate better is not just a one-way street: I’m calling upon all our Members to meet us in the middle and offer your thoughts and views on how the NACFB can work harder to ensure our Members are at the heart of everything we do. There will be additional opportunities to offer feedback throughout 2018.

0330 123 4521

Closer on our horizon is the annual NACFB gala dinner on 30th November.

The AGM will take place on the same day and will be the first place to hear how your feedback is helping shape the Association’s future.

or email cm.broker@shawbrook.co.uk

I look forward to seeing you there.

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

Graham Toy CEO NACFB

In this November issue

First, thank you to all those who came Commercial Finance along and offered their frank INTERN AT I O N A Lfeedback, ( JERSEY SUBSIDIARY ) constructive guidance and suggestions 10-11 news bites S H A W B R O O K I N T E R N A T I O N A L L I M I T E Essential D for steering the future of your NACFB.

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:

Welcome | NACFB OFFSHORE

12

Investec provides PCF Bank with £15m facility

Introducing 14

Landbay implements new online portfolio submission platform

Case Studies 16

Developer secures 100% funding for Birmingham scheme 18 Tracker BTL loan enables expat portfolio growth 20-21 Asset finance boost for major festival stage 22-23 Overcoming legal challenges for £26m landmark project

Special Features 34-36 Is age an issue?

38 Trends in offshore lending 40 The world outside your comfort zone

Compliance Updates 42-44 GDPR: what you need to know

Spotlight 46-47 Patrons’ day: engaging with NACFB lenders

Industry Guides 48 50

Financing potential Let’s get clear on autobid vs manual

Opinion & Commentary 52-53 Does vehicle finance have an image problem?

54 Leave no stone unturned for a re-bridge 56-57 If I had five minutes with the chancellor 58 Master brokers vital to getting us building

Cover Story 24-29 Commercial temperatures rise

Patron Profile 30-31 Reditum Capital

Ask the Expert 32

Jeff Longhurst

Warm regards, Graham Toy CEO, NACFB

For further information Kieran Jones, communications manager t. 020 7101 0359 Hamilton House, 1 Temple Avenue London EC4Y 0HA Email: Kieran.Jones@nacfb.org.uk

www.shawbrook.co.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

2

LOGO

P RO P E RT Y F I N A N C E D I V I S I O N | CO M M E RC I A L | S P E C I A L I S T BT L | CO M M E RC I A L I N V E S T M E N T | S T L & R E F U R B | T R A D I N G B U S I N E S S

SPECIALISTS IN GOOD SENSE

REGULAR SHAWB ROOK B ANK LIMITED SHAWB ROOK GROUP PLC

n

Short Term lending from 0.55%

n

Term lending from 2.99% above 3 month LIBOR*

n

Ltd companies, LLPs & Individuals

n

Broad range of security including HMOs & multi-lets

O

ver the last two months, I have led a series of Members’ and Patrons’ days in London to connect with those who are integral to making the NACFB what it is – and what an illuminating set of days they were. These were the first NACFB events that I attended without my ‘Patron hat’ on.

NACFB News 4-8 8 9

In the news Dates for your diary Notes from our sponsor

Top Story

You will have seen the Members’ day write-up in last month’s magazine and you can also see an overview of the Patrons’ day in this issue (page 46). One topic that came up repeatedly was that of engagement.

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

The drive for better engagement seems to exist in all forms of modern life, but in our world and within your Association, increasing engagement with you – our Members – is right at the top of my to-do list. This drive to communicate better is not just a one-way street: I’m calling upon all our Members to meet us in the middle and offer your thoughts and views on how the NACFB can work harder to ensure our Members are at the heart of everything we do. There will be additional opportunities to offer feedback throughout 2018.

0330 123 4521

Closer on our horizon is the annual NACFB gala dinner on 30th November.

The AGM will take place on the same day and will be the first place to hear how your feedback is helping shape the Association’s future.

or email cm.broker@shawbrook.co.uk

I look forward to seeing you there.

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

Graham Toy CEO NACFB

In this November issue

First, thank you to all those who came Commercial Finance along and offered their frank INTERN AT I O N A Lfeedback, ( JERSEY SUBSIDIARY ) constructive guidance and suggestions 10-11 news bites S H A W B R O O K I N T E R N A T I O N A L L I M I T E Essential D for steering the future of your NACFB.

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:

Welcome | NACFB OFFSHORE

12

Investec provides PCF Bank with £15m facility

Introducing 14

Landbay implements new online portfolio submission platform

Case Studies 16

Developer secures 100% funding for Birmingham scheme 18 Tracker BTL loan enables expat portfolio growth 20-21 Asset finance boost for major festival stage 22-23 Overcoming legal challenges for £26m landmark project

Special Features 34-36 Is age an issue?

38 Trends in offshore lending 40 The world outside your comfort zone

Compliance Updates 42-44 GDPR: what you need to know

Spotlight 46-47 Patrons’ day: engaging with NACFB lenders

Industry Guides 48 50

Financing potential Let’s get clear on autobid vs manual

Opinion & Commentary 52-53 Does vehicle finance have an image problem?

54 Leave no stone unturned for a re-bridge 56-57 If I had five minutes with the chancellor 58 Master brokers vital to getting us building

Cover Story 24-29 Commercial temperatures rise

Patron Profile 30-31 Reditum Capital

Ask the Expert 32

Jeff Longhurst

Warm regards, Graham Toy CEO, NACFB

For further information Kieran Jones, communications manager t. 020 7101 0359 Hamilton House, 1 Temple Avenue London EC4Y 0HA Email: Kieran.Jones@nacfb.org.uk

www.shawbrook.co.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

NACFB | in the news Association news and updates for November 2017

We’ve got you on speed dial.

NACFB announces GDPR compliance collaboration with AMI The NACFB has chaired a series of meetings with the Association of Mortgage Intermediaries (AMI) in a bid to pool ideas and resources, and best prepare for the upcoming General Data Protection Regulation (GDPR) due in May 2018.

The collaboration enables both parties to view the regulation through the eyes of commercial finance brokers and tailor ongoing guidance towards those who operate specifically within our world. The partnership will be mutually distributing updates over the coming months.

The collaboration forms part of the NACFB’s commitment to preserving the integrity of our membership and ensuring that we leap regulatory hurdles together. Industry regulation is only heading one way, and we want all our Members to remain

4 | NACFB Magazine

both ahead of the curve and fully compliant. To this end, earlier this year, we launched a bespoke, inhouse NACFB Compliance Services consultancy team, providing support aimed solely at our commercial finance broker Members. We are therefore offering a free telephone compliance consultation regarding our services, with our expert team, to all NACFB Members.

You can subscribe to NACFB Compliance Services for only £40+VAT per month. This gives you access to a model office

suite of tailored documents, discounted national workshops, full access to helpdesk consultants and free access for one person to our MyNACFB training and education system for one year.

Getting you finance isn’t the only thing we’re quick to do. We like to keep our brokers informed every step of the way, so your client doesn’t walk.

You can book your free consultation today by simply emailing compliance@nacfb. org.uk with a contact telephone number and a convenient time for our team to call you.

For more information visit www.nacfbcompliance.co.uk.

Call us on 0203 846 6809 or visit intermediaries.lendinvest.com. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929).

ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.

NACFB | in the news Association news and updates for November 2017

We’ve got you on speed dial.

NACFB announces GDPR compliance collaboration with AMI The NACFB has chaired a series of meetings with the Association of Mortgage Intermediaries (AMI) in a bid to pool ideas and resources, and best prepare for the upcoming General Data Protection Regulation (GDPR) due in May 2018.

The collaboration enables both parties to view the regulation through the eyes of commercial finance brokers and tailor ongoing guidance towards those who operate specifically within our world. The partnership will be mutually distributing updates over the coming months.

The collaboration forms part of the NACFB’s commitment to preserving the integrity of our membership and ensuring that we leap regulatory hurdles together. Industry regulation is only heading one way, and we want all our Members to remain

4 | NACFB Magazine

both ahead of the curve and fully compliant. To this end, earlier this year, we launched a bespoke, inhouse NACFB Compliance Services consultancy team, providing support aimed solely at our commercial finance broker Members. We are therefore offering a free telephone compliance consultation regarding our services, with our expert team, to all NACFB Members.

You can subscribe to NACFB Compliance Services for only £40+VAT per month. This gives you access to a model office

suite of tailored documents, discounted national workshops, full access to helpdesk consultants and free access for one person to our MyNACFB training and education system for one year.

Getting you finance isn’t the only thing we’re quick to do. We like to keep our brokers informed every step of the way, so your client doesn’t walk.

You can book your free consultation today by simply emailing compliance@nacfb. org.uk with a contact telephone number and a convenient time for our team to call you.

For more information visit www.nacfbcompliance.co.uk.

Call us on 0203 846 6809 or visit intermediaries.lendinvest.com. LendInvest Limited is registered at 8 Mortimer Street, London, W1T 3JJ (Company 08146929).

ICO number ZA179467. Your client’s property may be repossessed if they do not keep up repayments on their mortgage. For intermediaries only.

NACFB NEWS

NACFB NEWS

The Association’s new horizons Graham Toy CEO NACFB

O

ver the last 25 years, the NACFB has grown considerably in scale and complexity. On top of this, the pace of change has gone through the roof. After about 10 years of trading (ie 15 years ago), the NACFB had less than half the Members it does today and less than half the number of Patrons. That’s some change by anyone’s estimation.

If growth was the only consideration, governance wouldn’t be so important, but it’s not. When you take today’s operating environment, ie the challenges associated with regulation, Brexit uncertainty and a general election, the trading landscape is altogether a more complex beast for the NACFB than ever before.

In addition, while the business environment we are operating in is far from straightforward, one thing we can be sure of is that further challenges will arise as the NACFB responds to new and ongoing changes in the commercial finance arena. If all this wasn’t enough, the Association is also rapidly establishing its own new compliance services, which is like a business within a business.

So what does all this mean? Well, greater complexity plus more risks result in a heightened need for strong, effective governance.

The NACFB board has recently taken a look at what best practice says about governance structures and recognised that governance plays an increasingly important role in balancing the needs of an organisation and its stakeholders.

Part of the NACFB board’s role is to deliver the Association’s raison d’être, and one thing the board recognised is that it hasn’t been as clear as it could have about our strategy and plans, both in the short and long term.

6 | NACFB Magazine

Alongside all these business challenges is the internal one presented by an ever-rising bar in respect of the skills and quality expected of board members and leadership of the Association. The list of expected personal and technical qualities of a board director in 2017, for example, is so long and precise that one wonders whether anyone could fit the bill. To put it simply, the board should be a balance of the appropriate skills and experiences required to discharge its responsibilities.

However, securing the right people and providing development, support and appropriate infrastructure requires dedication and is an important challenge for the Association.

It is also important to look forward and consider what skills, knowledge and experience a board needs to lead and direct the Association towards its vision and business aims over the next five years. The skills of the board must be aligned to robust business plans.

Talent management within the board then needs to be linked to the NACFB’s strategy if the board is to be effective.

At its January 2017 meeting, led by the NACFB’s chairman, Paul Goodman, with support from interim CEO Rob Lankey, the NACFB board agreed the Association should conduct a review of its governance. They both drew on their experience of not only installing corporate governance across a variety of business structures, but also their understanding of the practical implications arising from implementing changes in governance.

What we need to address The Association wants to embed a stricter internal operating environment, so it’s crystal clear who can do what and who can sanction the actions.

We need to make sure the right piece of work is on the right desk. In practice, this means the main NACFB board remains the custodians of the Association’s strategy and direction.

The NACFB operations board, which meets monthly, deals with the operational matters, supporting the

executive, which in turn looks after the daily running of the Association.

The board felt it wasn’t meeting often enough in this fast-moving environment, so instead of four meetings a year, we’re moving to six. it also help a facilitated strategy ‘away day’ to refocus and cement the NACFB’s strategy.

Better management information (MI) was required, and to make sure there’s an excellent flow of information we’re introducing more detailed MI, so the board directors and executive know exactly what’s going on.

The board wants to explore the broadening of its skills, so at the AGM in November, the Association will be asking Members to vote to allow the NACFB’s board to include independent board members and Patrons’ representatives for the first time. While this might sound a bit radical, it isn’t really. Yes, it’s a first for the Association, but if you look at the format and composition of other trade bodies and similar organisations, most look for a mix of skills relevant to their industry.

So we’re going to propose having a board of 12, comprising six NACFB broker board members, two independent board members (these could be valuers, solicitors or other relevant stakeholders in the commercial finance industry) and two members who hold leading roles within our Patron firms. The members will always be the majority, but we sincerely feel that this broadening will extend the insight, knowledge, skill and experience of the NACFB board. At the board’s strategy ‘away day’, we considered this proposal in more depth and honed the details so we can ask for your support at the AGM on 30th November. It’s a big change, so we’re not going to rush it and we’ll take the time to ensure we get the structure right. But you can see, from the direction of travel, that we’re prepared and not afraid to make big decisions to enhance the NACFB for the next quarter of a century.

How will the Association be structured?

The chart shown opposite sets out how we’re planning to structure the

Association going forward and we’ll be asking our Members to vote for it at the November AGM. Advisory board (AB) This is the main board and it’s proposed to comprise of six broker board members, two co-optee broker board members, two independents and two Patrons. Meets six times per annum. Custodian of strategy and direction.

Operations board (OB) Responsible for commercial/ operational activities and comprising of the executive of the NACFB and members of the AB, and has the option to appoint NACFB broker Members for special projects Compliance committee, reporting to the main board (code of practice 1.2.2)

Compliance committee, reporting to the main board (code of practice 1.2.2)

Advisory board (AB)

This is the main board and it’s proposed to comprise of six broker board members, two co-optee broker board members, two independents and two Patrons. Meets six times per annum. Custodian of strategy and direction.

Operations board (OB)

Responsible for commercial/operational activities and comprising of the executive of the NACFB and members of the AB, and has the option to appoint NACFB broker Members for special projects

CEO of the NACFB

CEO of the NACFB

Norman Chambers, managing director of the NACFB Roger Deane, managing director of NACFB Compliance Services business Transition to the new NACFB structure The transition from the current structure of the Association to the new will be carried out carefully and gradually. We’re going to ask our Members to support the changes at our AGM in November, but we wanted to talk about them to the industry, now, in an open way. The implementation of the new board structure will take place in the 12 months from the 2017 AGM. Given the Association’s structure has remained largely the same for nearly a quarter of a century, it would not be prudent to rush things; but there’s a lot we are doing now to improve governance and efficiency.

For example, we’ve implemented a new document called standing orders – which doesn’t have anything to do with banking by the way. This document is effectively the internal rule book of who is accountable and responsible for what at the Association, and who has the authority to agree things and get them done.

We’ve also already implemented better MI, along with a host of other,

Norman Chambers managing director of the NACFB

Roger Deane

managing director of NACFB Compliance Services business

Notes on the structure chart

1) The proposed structure preserves the overall structure of the NACFB, ie an executive, sub-committees, an operations board and a main board, renamed the advisory board.

2) As mentioned above, it recognises the important role independent and Patron board members could play, alongside the broker board members. Patrons are a critical part of the NACFB and always have been. Independent and Patron members bring to the table a vast amount of experience and will strengthen the NACFB board. A not-forprofit trade body such as the NACFB needs to draw on the expertise available to it, as well as reflecting the role it plays when it comes to influencing its stakeholders.

small tweaks to make the business more effective. The lid has also been lifted on the commerciality of both the gala dinner and the Commercial Finance Expo. The net result of all of this is the Association will make a greater profit in 2017 than we first expected and we are proud of that.

There is no shame at all in a not-forprofit organisation making a lot of profit. Not-for-profit does not mean don’t make one. We will absolutely make as much profit as possible for reinvestment into what the NACFB

does and provide the essential fuel to get new initiatives off the launch pad.

Ahead of the 2017 AGM I call upon our Members and Patrons to please get behind us and support our aims.

There is no organisation out there which is better placed than the NACFB to not only represent the commercial finance industry, but also to lead the way in building industry standards. That’s not all: the NACFB is designed around the interests of you, the Members and Patrons.

NACFB Magazine | 7

NACFB NEWS

NACFB NEWS

The Association’s new horizons Graham Toy CEO NACFB

O

ver the last 25 years, the NACFB has grown considerably in scale and complexity. On top of this, the pace of change has gone through the roof. After about 10 years of trading (ie 15 years ago), the NACFB had less than half the Members it does today and less than half the number of Patrons. That’s some change by anyone’s estimation.

If growth was the only consideration, governance wouldn’t be so important, but it’s not. When you take today’s operating environment, ie the challenges associated with regulation, Brexit uncertainty and a general election, the trading landscape is altogether a more complex beast for the NACFB than ever before.

In addition, while the business environment we are operating in is far from straightforward, one thing we can be sure of is that further challenges will arise as the NACFB responds to new and ongoing changes in the commercial finance arena. If all this wasn’t enough, the Association is also rapidly establishing its own new compliance services, which is like a business within a business.

So what does all this mean? Well, greater complexity plus more risks result in a heightened need for strong, effective governance.

The NACFB board has recently taken a look at what best practice says about governance structures and recognised that governance plays an increasingly important role in balancing the needs of an organisation and its stakeholders.

Part of the NACFB board’s role is to deliver the Association’s raison d’être, and one thing the board recognised is that it hasn’t been as clear as it could have about our strategy and plans, both in the short and long term.

6 | NACFB Magazine

Alongside all these business challenges is the internal one presented by an ever-rising bar in respect of the skills and quality expected of board members and leadership of the Association. The list of expected personal and technical qualities of a board director in 2017, for example, is so long and precise that one wonders whether anyone could fit the bill. To put it simply, the board should be a balance of the appropriate skills and experiences required to discharge its responsibilities.

However, securing the right people and providing development, support and appropriate infrastructure requires dedication and is an important challenge for the Association.

It is also important to look forward and consider what skills, knowledge and experience a board needs to lead and direct the Association towards its vision and business aims over the next five years. The skills of the board must be aligned to robust business plans.

Talent management within the board then needs to be linked to the NACFB’s strategy if the board is to be effective.

At its January 2017 meeting, led by the NACFB’s chairman, Paul Goodman, with support from interim CEO Rob Lankey, the NACFB board agreed the Association should conduct a review of its governance. They both drew on their experience of not only installing corporate governance across a variety of business structures, but also their understanding of the practical implications arising from implementing changes in governance.

What we need to address The Association wants to embed a stricter internal operating environment, so it’s crystal clear who can do what and who can sanction the actions.

We need to make sure the right piece of work is on the right desk. In practice, this means the main NACFB board remains the custodians of the Association’s strategy and direction.

The NACFB operations board, which meets monthly, deals with the operational matters, supporting the

executive, which in turn looks after the daily running of the Association.

The board felt it wasn’t meeting often enough in this fast-moving environment, so instead of four meetings a year, we’re moving to six. it also help a facilitated strategy ‘away day’ to refocus and cement the NACFB’s strategy.

Better management information (MI) was required, and to make sure there’s an excellent flow of information we’re introducing more detailed MI, so the board directors and executive know exactly what’s going on.

The board wants to explore the broadening of its skills, so at the AGM in November, the Association will be asking Members to vote to allow the NACFB’s board to include independent board members and Patrons’ representatives for the first time. While this might sound a bit radical, it isn’t really. Yes, it’s a first for the Association, but if you look at the format and composition of other trade bodies and similar organisations, most look for a mix of skills relevant to their industry.

So we’re going to propose having a board of 12, comprising six NACFB broker board members, two independent board members (these could be valuers, solicitors or other relevant stakeholders in the commercial finance industry) and two members who hold leading roles within our Patron firms. The members will always be the majority, but we sincerely feel that this broadening will extend the insight, knowledge, skill and experience of the NACFB board. At the board’s strategy ‘away day’, we considered this proposal in more depth and honed the details so we can ask for your support at the AGM on 30th November. It’s a big change, so we’re not going to rush it and we’ll take the time to ensure we get the structure right. But you can see, from the direction of travel, that we’re prepared and not afraid to make big decisions to enhance the NACFB for the next quarter of a century.

How will the Association be structured?

The chart shown opposite sets out how we’re planning to structure the

Association going forward and we’ll be asking our Members to vote for it at the November AGM. Advisory board (AB) This is the main board and it’s proposed to comprise of six broker board members, two co-optee broker board members, two independents and two Patrons. Meets six times per annum. Custodian of strategy and direction.

Operations board (OB) Responsible for commercial/ operational activities and comprising of the executive of the NACFB and members of the AB, and has the option to appoint NACFB broker Members for special projects Compliance committee, reporting to the main board (code of practice 1.2.2)

Compliance committee, reporting to the main board (code of practice 1.2.2)

Advisory board (AB)

This is the main board and it’s proposed to comprise of six broker board members, two co-optee broker board members, two independents and two Patrons. Meets six times per annum. Custodian of strategy and direction.

Operations board (OB)

Responsible for commercial/operational activities and comprising of the executive of the NACFB and members of the AB, and has the option to appoint NACFB broker Members for special projects

CEO of the NACFB

CEO of the NACFB

Norman Chambers, managing director of the NACFB Roger Deane, managing director of NACFB Compliance Services business Transition to the new NACFB structure The transition from the current structure of the Association to the new will be carried out carefully and gradually. We’re going to ask our Members to support the changes at our AGM in November, but we wanted to talk about them to the industry, now, in an open way. The implementation of the new board structure will take place in the 12 months from the 2017 AGM. Given the Association’s structure has remained largely the same for nearly a quarter of a century, it would not be prudent to rush things; but there’s a lot we are doing now to improve governance and efficiency.

For example, we’ve implemented a new document called standing orders – which doesn’t have anything to do with banking by the way. This document is effectively the internal rule book of who is accountable and responsible for what at the Association, and who has the authority to agree things and get them done.

We’ve also already implemented better MI, along with a host of other,

Norman Chambers managing director of the NACFB

Roger Deane

managing director of NACFB Compliance Services business

Notes on the structure chart

1) The proposed structure preserves the overall structure of the NACFB, ie an executive, sub-committees, an operations board and a main board, renamed the advisory board.

2) As mentioned above, it recognises the important role independent and Patron board members could play, alongside the broker board members. Patrons are a critical part of the NACFB and always have been. Independent and Patron members bring to the table a vast amount of experience and will strengthen the NACFB board. A not-forprofit trade body such as the NACFB needs to draw on the expertise available to it, as well as reflecting the role it plays when it comes to influencing its stakeholders.

small tweaks to make the business more effective. The lid has also been lifted on the commerciality of both the gala dinner and the Commercial Finance Expo. The net result of all of this is the Association will make a greater profit in 2017 than we first expected and we are proud of that.

There is no shame at all in a not-forprofit organisation making a lot of profit. Not-for-profit does not mean don’t make one. We will absolutely make as much profit as possible for reinvestment into what the NACFB

does and provide the essential fuel to get new initiatives off the launch pad.

Ahead of the 2017 AGM I call upon our Members and Patrons to please get behind us and support our aims.

There is no organisation out there which is better placed than the NACFB to not only represent the commercial finance industry, but also to lead the way in building industry standards. That’s not all: the NACFB is designed around the interests of you, the Members and Patrons.

NACFB Magazine | 7

NACFB NEWS

NACFB NEWS

Dates for your diary

Notes from our sponsor Karen Bennett Managing director of commercial mortgages Shawbrook Bank

NACFB Barcadia Roadshow - South When: 1st November, 9am–2pm Where: Royal Berkshire Conference Stadium, Reading Birmingham GDPR workshop When: 1st November, 10am–4.30pm Where: National Exhibition Centre, Birmingham NACFB Barcadia Roadshow Midlands When: 2nd November, 9am–2pm Where: Pride Park Stadium, Derby

NACFB to host asset finance day in Bolton NACFB is hosting a dedicated asset finance day, catering specifically towards our asset finance Members. The event will take place at the Bolton Whites Hotel on 16th November, and will be sponsored by NACFB Patrons Shawbrook Asset Finance, Aldermore, Hitachi & Investec. If you are an asset finance broker and are interested in attending, please email andrina.dhillon@nacfb.org.uk.

Bristol GDPR Workshop When: 2nd November, 10am–4.30pm Where: Aztec W, Almondsbury, Bristol Newcastle GDPR Workshop When: 8th November, 10am–4.30pm Where: Crowne Plaza Newcastle, Newcastle Edinburgh GDPR Workshop When: 9th November, 10am–4.30pm Where: Radisson Blu Hotel Edinburgh, Edinburgh Gatwick GDPR Workshop When: 14th November, 10am–4.30pm Where: Hilton London Gatwick, Surrey London GDPR Workshop When: 15th November, 10am–4.30pm Where: Radisson Blue Edwardian Vanderbilt Hotel, London NACFB asset finance day When: 16th November, 10am–3pm Where: Bolton Whites Hotel, Macron Stadium, Bolton LendInvest Broker Academy Course When: 22nd November, 9am–5pm Where: Two Fitzroy Place, London

Limited places left for our gala dinner The 2017 NACFB gala dinner and awards ceremony takes place on 30th November and there are still a very limited number of places available. We are now collecting donations for the silent auction, which will take place during the dinner. All proceeds from the auction will be donated to Young Minds, the UK’s leading charity committed to improving the wellbeing and mental health of children and young people. If you would like to donate a prize, please email andrina.dhillon@nacfb.org.uk.

Member update At the time of going to print, we count a total of : 828 Member firms and 138 Patrons.

8 | NACFB Magazine

Manchester GDPR Workshop When: 22nd November, 10am–4.30pm Where: Radisson Blu Manchester Airport, Manchester AGM at the Park Plaza When: 30th November, 2pm-4pm Where: Park Plaza Westminster Bridge Gala Dinner & NACFB Awards When: 30th November, 6.30pm - 12pm Where: Park Plaza Westminster Bridge, Commercial Finance Expo 2018 When: 20th June 2018 9.30am-4.30pm Where: 9.30am-4.30pm

With the second round of PRA changes now live, I am hopeful for a period of relative calm within the industry as we all seek to adapt to the muchchanged regulatory environment.

T

he full impact of the changes remains to be seen, however, several lenders have announced some fairly serious strategic shifts over the past few months. From a Shawbrook perspective, outside of some policy and process adjustments, it continues to be business as usual, with our appetite to lend to the professional investor and landlord community remaining strong.

There is speculation as to the ongoing impact. Our thoughts are that the increase in resource necessary to cope with the somewhat onerous underwriting requirements will have an impact on pricing, and that the time to assess an application will increase considerably, compared with the automated online processes most mortgage brokers and customers would be familiar with. In addition, where the portfolio is geared in excess of 75%, some lenders are likely to have some sensitivity around refinance risk.

This may result in less funding being made available in order to reduce exposure across the overall portfolio.

Lenders may also ask investors to de-leverage the higher loan-to-value

properties, or in some cases, may choose not to lend at all based on the view that the portfolio is not sensibly geared and that they would potentially be lending to a vulnerable investor.

The impact may also be felt across those properties that are due to be refinanced within the next 12 months, as lenders will likely check if this is possible. Plus, if the income or loanto-value is tight, there may well be a requirement to de-leverage. There will also be the assumption that portfolio landlords are higher-rate taxpayers and, therefore, any cases that move forward within a lower tax band are likely to require confirmation of investors’ tax positions. The customer will need to provide evidence to demonstrate that they have sufficient income to support their personal living expenses, and may even need to provide proof of all rental payments made over the last 12 months.

three mortgaged properties. This just highlights the need to build strong relationships with specialists of all kinds and it has also never been more important that industry bodies support education to ensure that the market, and in turn customers, are up to speed.

As mentioned, I am hopeful for a period of calm as we all seek to adjust to the newer world, but as with all things in this fast-paced environment, the next shift could be just around the corner – so it may pay not to hang about.

It’s also important to note that we may see more institutions pulling out of the portfolio landlord market altogether and focusing purely on the ‘simpler’ customers with one to

NACFB Magazine | 9

NACFB NEWS

NACFB NEWS

Dates for your diary

Notes from our sponsor Karen Bennett Managing director of commercial mortgages Shawbrook Bank

NACFB Barcadia Roadshow - South When: 1st November, 9am–2pm Where: Royal Berkshire Conference Stadium, Reading Birmingham GDPR workshop When: 1st November, 10am–4.30pm Where: National Exhibition Centre, Birmingham NACFB Barcadia Roadshow Midlands When: 2nd November, 9am–2pm Where: Pride Park Stadium, Derby

NACFB to host asset finance day in Bolton NACFB is hosting a dedicated asset finance day, catering specifically towards our asset finance Members. The event will take place at the Bolton Whites Hotel on 16th November, and will be sponsored by NACFB Patrons Shawbrook Asset Finance, Aldermore, Hitachi & Investec. If you are an asset finance broker and are interested in attending, please email andrina.dhillon@nacfb.org.uk.

Bristol GDPR Workshop When: 2nd November, 10am–4.30pm Where: Aztec W, Almondsbury, Bristol Newcastle GDPR Workshop When: 8th November, 10am–4.30pm Where: Crowne Plaza Newcastle, Newcastle Edinburgh GDPR Workshop When: 9th November, 10am–4.30pm Where: Radisson Blu Hotel Edinburgh, Edinburgh Gatwick GDPR Workshop When: 14th November, 10am–4.30pm Where: Hilton London Gatwick, Surrey London GDPR Workshop When: 15th November, 10am–4.30pm Where: Radisson Blue Edwardian Vanderbilt Hotel, London NACFB asset finance day When: 16th November, 10am–3pm Where: Bolton Whites Hotel, Macron Stadium, Bolton LendInvest Broker Academy Course When: 22nd November, 9am–5pm Where: Two Fitzroy Place, London

Limited places left for our gala dinner The 2017 NACFB gala dinner and awards ceremony takes place on 30th November and there are still a very limited number of places available. We are now collecting donations for the silent auction, which will take place during the dinner. All proceeds from the auction will be donated to Young Minds, the UK’s leading charity committed to improving the wellbeing and mental health of children and young people. If you would like to donate a prize, please email andrina.dhillon@nacfb.org.uk.

Member update At the time of going to print, we count a total of : 828 Member firms and 138 Patrons.

8 | NACFB Magazine

Manchester GDPR Workshop When: 22nd November, 10am–4.30pm Where: Radisson Blu Manchester Airport, Manchester AGM at the Park Plaza When: 30th November, 2pm-4pm Where: Park Plaza Westminster Bridge Gala Dinner & NACFB Awards When: 30th November, 6.30pm - 12pm Where: Park Plaza Westminster Bridge, Commercial Finance Expo 2018 When: 20th June 2018 9.30am-4.30pm Where: 9.30am-4.30pm

With the second round of PRA changes now live, I am hopeful for a period of relative calm within the industry as we all seek to adapt to the muchchanged regulatory environment.

T

he full impact of the changes remains to be seen, however, several lenders have announced some fairly serious strategic shifts over the past few months. From a Shawbrook perspective, outside of some policy and process adjustments, it continues to be business as usual, with our appetite to lend to the professional investor and landlord community remaining strong.

There is speculation as to the ongoing impact. Our thoughts are that the increase in resource necessary to cope with the somewhat onerous underwriting requirements will have an impact on pricing, and that the time to assess an application will increase considerably, compared with the automated online processes most mortgage brokers and customers would be familiar with. In addition, where the portfolio is geared in excess of 75%, some lenders are likely to have some sensitivity around refinance risk.

This may result in less funding being made available in order to reduce exposure across the overall portfolio.

Lenders may also ask investors to de-leverage the higher loan-to-value

properties, or in some cases, may choose not to lend at all based on the view that the portfolio is not sensibly geared and that they would potentially be lending to a vulnerable investor.

The impact may also be felt across those properties that are due to be refinanced within the next 12 months, as lenders will likely check if this is possible. Plus, if the income or loanto-value is tight, there may well be a requirement to de-leverage. There will also be the assumption that portfolio landlords are higher-rate taxpayers and, therefore, any cases that move forward within a lower tax band are likely to require confirmation of investors’ tax positions. The customer will need to provide evidence to demonstrate that they have sufficient income to support their personal living expenses, and may even need to provide proof of all rental payments made over the last 12 months.

three mortgaged properties. This just highlights the need to build strong relationships with specialists of all kinds and it has also never been more important that industry bodies support education to ensure that the market, and in turn customers, are up to speed.

As mentioned, I am hopeful for a period of calm as we all seek to adjust to the newer world, but as with all things in this fast-paced environment, the next shift could be just around the corner – so it may pay not to hang about.

It’s also important to note that we may see more institutions pulling out of the portfolio landlord market altogether and focusing purely on the ‘simpler’ customers with one to

NACFB Magazine | 9

Commercial Finance

New packager enters specialist market

The packager Thistle Finance has announced its official launch with the aim of restoring the sector’s “old-fashioned values”.

Thistle will offer support to brokers around the UK, particularly in the underserved markets of Scotland and Northern Ireland.

Thistle will operate as a whole-of-market broker, with its initial focus including bridging finance, commercial mortgages, development finance and BTL mortgages.

Activity in the UK conveyancing market saw a significant decline in Q2 2017, according to a report from Search Acumen.

Stagnant housing supply and restricted home-moving pushed conveyancing levels down 14% to 210,964 from 245,738 in Q1 2017 – the fewest cases in a single quarter since mid-2013.

The report also found fewer active conveyancing businesses now compared with four years ago.

Sajid Javid reveals new planning approach Communities secretary Sajid Javid has announced an innovative approach to planning new homes to ensure they’re built where they are most needed.

The new approach – first suggested in the government’s housing white paper – will help give a realistic picture of how many homes are needed in each local area.

The alternative business funding provider, ThinCats, has appointed Geoff O’Brien as origination manager for Scotland. Geoff will be leading all new business originations across the region and will be looking to develop local relationships.

His previous experience includes director-level positions at Santander and Clydesdale Bank, specialising in business development and supporting the SME market.

HTB appoints two heads to asset finance team Hampshire Trust Bank (HTB) has announced two new appointments to its asset finance team.

The specialist bank has hired Michael Godwin as head of operations and Robert Harris as head of wholesale finance.

Michael will focus on improving automation and process efficiency, while Robert will help build out the bank’s wholesale finance offering.

Assetz Capital has reported a 175% year-on-year increase in the number of property development projects it has funded in the UK. Its development-focused lending in July reached around 5% of the entire UK banking system’s lending of £537m towards newly constructed buildings.

Projects include Trent Pads’ student accommodation block and backing Athena Healthcare.

Foundation Home Loans raises maximum loan size Foundation Home Loans has announced it is increasing its maximum loan size to £1m for loans up to 65% LTV in response to growing demand.

The specialist mortgage lender announced the increase is taking place with immediate effect with no change to pricing.

For loans up to 75% and for houses in multiple occupation, the maximum loan size remains £500,000.

Connect to enable access to Knowledge Bank

1pm posts 17% increase in profit before tax 1pm PLC has announced a 17% increase in profit before tax for the year ended 31st May 2017.

The SME finance provider saw profit before tax and exceptional items grow to £4.3m, while revenue for the year increased by 35% to £16.9m.

The group has provided or arranged lending for over 16,150 customers and end-users.

ThinCats hires dedicated origination manager for Scotland

Only 54% of BTL brokers understand the latest PRA changes Just over half of BTL brokers (54%) feel comfortable regarding the new portfolio landlord application rules, according to the latest survey from Kent Reliance.

However, 31% were still unsure of their consequences, while 13% didn’t know when the changes were coming into effect and 2% were unaware of them.

Assetz Capital reports 175% increase in development lending

Gateley PLC joins the ASTL Gateley PLC – the legal business of law-led professional services group Gateley – has joined the Association of Short Term Lenders (ASTL) as an associate member.

Gateley PLC offers a range of services, including dispute resolution, banking and financial services, corporate, commercial and real estate.

Earlier this year, the company reported a 15.7% increase in revenue and 18.8% rise in pre-tax profits.

Conveyancers register fewest transactions since 2013

Clever partners with LendInvest Clever Lending has been appointed as a strategic partner of LendInvest to distribute its specialist bridging and development finance products.

Brokers can work directly with the specialist distributor to take advantage of the partnership for cases such as auction purchase, renovation or conversion.

Clever Lending provides packaging expertise in first and second charge mortgages, bridging and commercial finance.

Trade bodies back LendInvest Property Development Academy

Three UK industry bodies have announced their public support for the LendInvest Property Development Academy.

The Centre for Entrepreneurs, Homes for Scotland and the Home Builders Federation have praised the education course, established in 2016 to help develop the skills of new, small-scale developers.

So far, more than 215 applicants have been accepted to attend.

Connect for Intermediaries has formed a partnership with the newly launched criteria searching system Knowledge Bank.

Connect will provide access to Knowledge Bank for all of its appointed representatives and other supporting brokers across both its network and packaging arm.

Advisers will be able to search more than 18,000 different criteria across more than 43 lenders.

36% of UK adults did not save or invest last quarter Over a third of UK adults (36%) have not saved or invested money in the last three months, according to RateSetter’s quarterly tracker.

On average, people saved or invested £232 each month in the last quarter.

Twenty-five- to 34-yearolds put away the most over the period (averaging £278 a month), followed by those aged between 35 and 44 (£260 a month).

Brightstar added to L&G’s specialist distributor panel

Brightstar has been appointed to Legal & General Mortgage Club’s specialist distributor panel as a packager.

Brightstar’s full range of packaging products will be available to L&G Mortgage Club members with access to the distributor’s lending hub.

Brightstar’s Private Label brand will also be available and contains a range of specialist products, including the mortgage tailor, which focuses on bespoke products.

Starling to launch business banking Starling Bank has announced it will be expanding its offering into business accounts.

The Starling for Business account will initially be designed for entrepreneurs, sole traders and SME owners, offering business finance management from a smartphone.

Registration for interested customers is open, with an anticipated live date in early 2018.

Commercial Finance

New packager enters specialist market

The packager Thistle Finance has announced its official launch with the aim of restoring the sector’s “old-fashioned values”.

Thistle will offer support to brokers around the UK, particularly in the underserved markets of Scotland and Northern Ireland.

Thistle will operate as a whole-of-market broker, with its initial focus including bridging finance, commercial mortgages, development finance and BTL mortgages.

Activity in the UK conveyancing market saw a significant decline in Q2 2017, according to a report from Search Acumen.

Stagnant housing supply and restricted home-moving pushed conveyancing levels down 14% to 210,964 from 245,738 in Q1 2017 – the fewest cases in a single quarter since mid-2013.

The report also found fewer active conveyancing businesses now compared with four years ago.

Sajid Javid reveals new planning approach Communities secretary Sajid Javid has announced an innovative approach to planning new homes to ensure they’re built where they are most needed.

The new approach – first suggested in the government’s housing white paper – will help give a realistic picture of how many homes are needed in each local area.

The alternative business funding provider, ThinCats, has appointed Geoff O’Brien as origination manager for Scotland. Geoff will be leading all new business originations across the region and will be looking to develop local relationships.

His previous experience includes director-level positions at Santander and Clydesdale Bank, specialising in business development and supporting the SME market.

HTB appoints two heads to asset finance team Hampshire Trust Bank (HTB) has announced two new appointments to its asset finance team.

The specialist bank has hired Michael Godwin as head of operations and Robert Harris as head of wholesale finance.

Michael will focus on improving automation and process efficiency, while Robert will help build out the bank’s wholesale finance offering.

Assetz Capital has reported a 175% year-on-year increase in the number of property development projects it has funded in the UK. Its development-focused lending in July reached around 5% of the entire UK banking system’s lending of £537m towards newly constructed buildings.

Projects include Trent Pads’ student accommodation block and backing Athena Healthcare.

Foundation Home Loans raises maximum loan size Foundation Home Loans has announced it is increasing its maximum loan size to £1m for loans up to 65% LTV in response to growing demand.

The specialist mortgage lender announced the increase is taking place with immediate effect with no change to pricing.

For loans up to 75% and for houses in multiple occupation, the maximum loan size remains £500,000.

Connect to enable access to Knowledge Bank

1pm posts 17% increase in profit before tax 1pm PLC has announced a 17% increase in profit before tax for the year ended 31st May 2017.

The SME finance provider saw profit before tax and exceptional items grow to £4.3m, while revenue for the year increased by 35% to £16.9m.

The group has provided or arranged lending for over 16,150 customers and end-users.

ThinCats hires dedicated origination manager for Scotland

Only 54% of BTL brokers understand the latest PRA changes Just over half of BTL brokers (54%) feel comfortable regarding the new portfolio landlord application rules, according to the latest survey from Kent Reliance.

However, 31% were still unsure of their consequences, while 13% didn’t know when the changes were coming into effect and 2% were unaware of them.

Assetz Capital reports 175% increase in development lending

Gateley PLC joins the ASTL Gateley PLC – the legal business of law-led professional services group Gateley – has joined the Association of Short Term Lenders (ASTL) as an associate member.

Gateley PLC offers a range of services, including dispute resolution, banking and financial services, corporate, commercial and real estate.

Earlier this year, the company reported a 15.7% increase in revenue and 18.8% rise in pre-tax profits.

Conveyancers register fewest transactions since 2013

Clever partners with LendInvest Clever Lending has been appointed as a strategic partner of LendInvest to distribute its specialist bridging and development finance products.

Brokers can work directly with the specialist distributor to take advantage of the partnership for cases such as auction purchase, renovation or conversion.

Clever Lending provides packaging expertise in first and second charge mortgages, bridging and commercial finance.

Trade bodies back LendInvest Property Development Academy

Three UK industry bodies have announced their public support for the LendInvest Property Development Academy.

The Centre for Entrepreneurs, Homes for Scotland and the Home Builders Federation have praised the education course, established in 2016 to help develop the skills of new, small-scale developers.

So far, more than 215 applicants have been accepted to attend.

Connect for Intermediaries has formed a partnership with the newly launched criteria searching system Knowledge Bank.

Connect will provide access to Knowledge Bank for all of its appointed representatives and other supporting brokers across both its network and packaging arm.

Advisers will be able to search more than 18,000 different criteria across more than 43 lenders.

36% of UK adults did not save or invest last quarter Over a third of UK adults (36%) have not saved or invested money in the last three months, according to RateSetter’s quarterly tracker.

On average, people saved or invested £232 each month in the last quarter.

Twenty-five- to 34-yearolds put away the most over the period (averaging £278 a month), followed by those aged between 35 and 44 (£260 a month).

Brightstar added to L&G’s specialist distributor panel

Brightstar has been appointed to Legal & General Mortgage Club’s specialist distributor panel as a packager.

Brightstar’s full range of packaging products will be available to L&G Mortgage Club members with access to the distributor’s lending hub.

Brightstar’s Private Label brand will also be available and contains a range of specialist products, including the mortgage tailor, which focuses on bespoke products.

Starling to launch business banking Starling Bank has announced it will be expanding its offering into business accounts.

The Starling for Business account will initially be designed for entrepreneurs, sole traders and SME owners, offering business finance management from a smartphone.

Registration for interested customers is open, with an anticipated live date in early 2018.

Top | story Our pick of the latest Patron news

Investec provides PCF Bank with £15m facility Vera Sugar Editor NACFB Magazine

Investec Asset Finance Group has provided a £15m block discounting facility to PCF Bank to help simplify its borrowing structure.

T

he bank worked with Investec Asset Finance’s wholesale lending team to obtain support for its growth strategy through block discounting. A type of wholesale lending facility, block discounting is best suited for companies looking to release capital tied up in finance agreements to reinvest in their business for growth.

“We wanted to work with a partner who understood the goals we needed to achieve and by when,” explained Scott Maybury, CEO of PCF Group. “It was important that the funding structure be kept simple but that it was of sufficient scale to allow us to focus on delivering our growth plans.”

Gregg Pietersen, a member of Investec’s wholesale lending team, explained how they were able to support PCF through close collaboration to “get a deep understanding of what they wanted to achieve before presenting a suitable funding solution”.

“It was clear from the outset that PCF needed support with a large facility and that speed, flexibility and simplicity were important to them.

12 | NACFB Magazine

We presented PCF with a £15m block discounting solution that would help the bank to simplify its borrowing structure, which meant they could then focus on their growth objectives.”

Established in 1994 and having launched as a fully operational bank in July 2017, PCF now works with over 70,000 customers, offering a range of savings and finance products, including hire purchase and finance lease facilities for vehicle and plant and equipment.

Besides block discounting, Investec’s wholesale offering also includes receivables finance, an off-balance-sheet solution for businesses to release capital.

“This transaction demonstrates how we are able to provide large, first-time facilities to support our clients,” Gregg added.

“It’s our ambition to continue supporting UK businesses by delivering funding solutions that are relevant, and to pair that with excellent understanding of customer requirements to help our customers achieve their ambitions.”

Top | story Our pick of the latest Patron news

Investec provides PCF Bank with £15m facility Vera Sugar Editor NACFB Magazine

Investec Asset Finance Group has provided a £15m block discounting facility to PCF Bank to help simplify its borrowing structure.

T

he bank worked with Investec Asset Finance’s wholesale lending team to obtain support for its growth strategy through block discounting. A type of wholesale lending facility, block discounting is best suited for companies looking to release capital tied up in finance agreements to reinvest in their business for growth.

“We wanted to work with a partner who understood the goals we needed to achieve and by when,” explained Scott Maybury, CEO of PCF Group. “It was important that the funding structure be kept simple but that it was of sufficient scale to allow us to focus on delivering our growth plans.”

Gregg Pietersen, a member of Investec’s wholesale lending team, explained how they were able to support PCF through close collaboration to “get a deep understanding of what they wanted to achieve before presenting a suitable funding solution”.

“It was clear from the outset that PCF needed support with a large facility and that speed, flexibility and simplicity were important to them.

12 | NACFB Magazine

We presented PCF with a £15m block discounting solution that would help the bank to simplify its borrowing structure, which meant they could then focus on their growth objectives.”

Established in 1994 and having launched as a fully operational bank in July 2017, PCF now works with over 70,000 customers, offering a range of savings and finance products, including hire purchase and finance lease facilities for vehicle and plant and equipment.

Besides block discounting, Investec’s wholesale offering also includes receivables finance, an off-balance-sheet solution for businesses to release capital.

“This transaction demonstrates how we are able to provide large, first-time facilities to support our clients,” Gregg added.

“It’s our ambition to continue supporting UK businesses by delivering funding solutions that are relevant, and to pair that with excellent understanding of customer requirements to help our customers achieve their ambitions.”

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

Landbay implements new online portfolio submission platform Paul Clampin Chief lending officer Landbay

S

pecialist buy-to-let lender Landbay has partnered with property risk software developer eTech to implement its new online portfolio submission platform.

Following from the PRA’s recent underwriting changes and building on eTech’s Buy to Let Hub, the lender is developing a simple online proposition which allows brokers to upload all portfolio property details.

The platform will also allow them to monitor and manage portfolios, as well as offering streamlined portfolio stress testing and income coverage ratio assessment.

In addition, the hub will automate all key criteria variables, sending automatic summary reports to Landbay’s underwriting team and allowing the lender to assess applications quickly.

Paul Clampin, chief lending officer at Landbay, said: “Combined with Landbay’s tech-enabled underwriting platform, portfolio landlords and their brokers are now able to use this efficient, straight-through process to secure a loan, while the robust back-end will make this as quick and accurate as possible.“ The partnership with eTech is part of Landbay’s ongoing commitment to being fully prepared for the PRA changes, ensuring that brokers are provided with the smoothest transition into stricter underwriting standards and without disruption to normal business.

Mark Blackwell, lending and surveying services director at eTech Solutions,

14 | NACFB Magazine

explained his company aims to make the new regulatory process as easy as possible for brokers, whether that’s through verification of security and portfolio addresses, or allowing data to be instantly uploaded to Landbay’s required template.

“Landbay recognises the need to make life easier for the broker,” Mark added. “With the buy-to-let market becoming ever more specialist, we believe the Buy to Let Hub will bring great advantages to both lender and broker. We look forward to working with Landbay at this time when the regulator now has bricks and mortar firmly on its compliance radar.”

Paul added: “Thanks to the support and expertise of eTech, our brokers can expect business as usual in the coming months.

“Landbay has always turned to technology to provide the best and most efficient service to brokers, and this partnership is yet another demonstration of that commitment to lead the way in terms of software and security.”

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

Landbay implements new online portfolio submission platform Paul Clampin Chief lending officer Landbay

S

pecialist buy-to-let lender Landbay has partnered with property risk software developer eTech to implement its new online portfolio submission platform.

Following from the PRA’s recent underwriting changes and building on eTech’s Buy to Let Hub, the lender is developing a simple online proposition which allows brokers to upload all portfolio property details.

The platform will also allow them to monitor and manage portfolios, as well as offering streamlined portfolio stress testing and income coverage ratio assessment.

In addition, the hub will automate all key criteria variables, sending automatic summary reports to Landbay’s underwriting team and allowing the lender to assess applications quickly.

Paul Clampin, chief lending officer at Landbay, said: “Combined with Landbay’s tech-enabled underwriting platform, portfolio landlords and their brokers are now able to use this efficient, straight-through process to secure a loan, while the robust back-end will make this as quick and accurate as possible.“ The partnership with eTech is part of Landbay’s ongoing commitment to being fully prepared for the PRA changes, ensuring that brokers are provided with the smoothest transition into stricter underwriting standards and without disruption to normal business.

Mark Blackwell, lending and surveying services director at eTech Solutions,

14 | NACFB Magazine

explained his company aims to make the new regulatory process as easy as possible for brokers, whether that’s through verification of security and portfolio addresses, or allowing data to be instantly uploaded to Landbay’s required template.

“Landbay recognises the need to make life easier for the broker,” Mark added. “With the buy-to-let market becoming ever more specialist, we believe the Buy to Let Hub will bring great advantages to both lender and broker. We look forward to working with Landbay at this time when the regulator now has bricks and mortar firmly on its compliance radar.”

Paul added: “Thanks to the support and expertise of eTech, our brokers can expect business as usual in the coming months.

“Landbay has always turned to technology to provide the best and most efficient service to brokers, and this partnership is yet another demonstration of that commitment to lead the way in terms of software and security.”

Avenues Case Studies

Type - F

Bromford Road, Hodge Hill

plots 17-20

Completion highlights from a selection of our Patrons and Members

Developer secures 100% funding for Birmingham scheme

L

ike so many SME developers, our client in Birmingham has the ambition and experience to grow his business. However, he was frustrated with funders chopping and changing terms and his broker was struggling to find flexibility in the market. If your project doesn’t fit the set criteria, there’s no way forward – or so it seemed.

Mark Holden Chairman Go Develop

The

(plots 17 & 19 handed)

Bedroom 3 Kitchen / Dining Master Bedroom

Landing

ST

Avenues

One of our Bromford Road, HodgeLiving Hill Room experienced developer clients, Thankfully, help was at hand. At this year’s NACFB Expo, our broker came WC based in the across Go Develop’s unique, 100% land and build funding that doesn’t require Midlands, a penny in17-20 from the developer.

Typesaid: - F “The plots (plotsAfter 17 & 19 handed) some further discussion with Lynsey delivery of a quality Porter, our business development director, the broker found no set product on time and spreadsheets or ‘computer says’ mentality. Being a principal funder, Ground Floor under budget are investing our own money nationwide, Living Room our broker understood that Go 4.98m x 2.53m (16ˊ04˝ x 8ˊ03˝) the main measures Develop could be flexible for the Kitchen/Dining right opportunities and make things 4.85m x 3.41m (15ˊ11˝ x 11ˊ02˝) of success in any happen, fast.

Bedroom 3 WC / Dining 2.05m x 0.88m (6ˊ09˝ x 2ˊ11˝) development project.” Kitchen Our broker simply provided a

ST

WC

development appraisal, including plans, ensured the project was between the target GDV of £2m-£15m and, in exchange, received full funding covering land, build, stamp duty and soft costs.

Master Bedroom

Bedroom 2 Bathroom

First Floor Master Bedroom 4.89m x 2.70m* (16ˊ00˝ x 8ˊ10˝*) Bedroom 2 3.50m x 2.76m

(11ˊ06˝ x 9ˊ01˝)

Bedroom 3 3.01m x 2.22m

(9ˊ10˝ x 7ˊ03˝)

Bathroom 2.12m x 1.99m

(7ˊ00˝ x 6ˊ06˝)

developer keeping the lion’s share of the profits, allowing them to expand their operation over multiple sites.

Our developer Currently, the development is ahead Landing was delighted of schedule, with site set-up works completed and excavation and * Maximum measurement has been used. NB: All dimensions are guide and may vary from plot to plot that please check with sales advisor.

Go Develop In this case, funding of nearly £3.36m foundation works commencing. was provided to replace a dilapidated In a year’s time, there should be a would do All enquiries contact the selling agents:0121 749 7888 pub with 21 new homes and four supercharged profit for the developer the admin, apartments close to the University of partner. As always, Go Develop also Birmingham.

Planning permission rewards relationships with their Living Room VAT returns, has been granted, and the project brokers and introducers, offering high 2-4 Hurst Lane, Castle Bromwich, Birmingham, West Midlands, B34 7HR should take around 13 months. procurement fees.

Bedroom 2 valuations and E: castlebromwich@burchelledwards.co.uk Bathroom A new Go Develop SPV was set up Our developer was delighted that Go chasing of the same day to hold the project until Develop would be the one to do the it’s finished and sold, with a profit admin, VAT returns, valuations and solicitors Please note: and plans show a typical house type. The house type may be built in a range of elevational finishes using a variety of materials. Floor plansofand share contract for bothIllustration parties. On chasing solicitors and surveyors positions may vary from plot to plot. This is because we operate a policy of continuous improvement and we work within the needs – of he thenow Planning completion and sale ofwindow the property, has his Sunday evenings Authorities. Please ask your Sales Adviser for precise details of the finish and specifications of your chosen home. the profit is divided, usually with the back. He said: “Go Develop offer a

Ground Floor 16 | NACFB Magazine

Living Room 4.98m x 2.53m

one-stop, property development funding solution, with a straighttalking, joint venture partnership.

The team is great to deal with and simply ‘gets’ new build.”

Like 92% of Go Develop partners, our Midlands developer has returned with three further projects. These include two based in West Bromwich and the Jewellery Quarter which, together, will result in the development of over 160 flats. Our developer partner added: “I work only with the best people in order to deliver an exceptional project every time.”

Go Develop currently has over 1,000 units under construction and plan to reach £250m partner funding in the next 18 months.

First Floor

(16ˊ04˝ x 8ˊ03˝)

Master Bedroom harkerhomes 4.89m x 2.70m* (16ˊ00˝ x

8ˊ10˝*)

www.harkerhomes.co.uk

NACFB Magazine | 17

Avenues Case Studies

Type - F

Bromford Road, Hodge Hill

plots 17-20

Completion highlights from a selection of our Patrons and Members

Developer secures 100% funding for Birmingham scheme

L

ike so many SME developers, our client in Birmingham has the ambition and experience to grow his business. However, he was frustrated with funders chopping and changing terms and his broker was struggling to find flexibility in the market. If your project doesn’t fit the set criteria, there’s no way forward – or so it seemed.

Mark Holden Chairman Go Develop

The

(plots 17 & 19 handed)

Bedroom 3 Kitchen / Dining Master Bedroom

Landing

ST

Avenues

One of our Bromford Road, HodgeLiving Hill Room experienced developer clients, Thankfully, help was at hand. At this year’s NACFB Expo, our broker came WC based in the across Go Develop’s unique, 100% land and build funding that doesn’t require Midlands, a penny in17-20 from the developer.

Typesaid: - F “The plots (plotsAfter 17 & 19 handed) some further discussion with Lynsey delivery of a quality Porter, our business development director, the broker found no set product on time and spreadsheets or ‘computer says’ mentality. Being a principal funder, Ground Floor under budget are investing our own money nationwide, Living Room our broker understood that Go 4.98m x 2.53m (16ˊ04˝ x 8ˊ03˝) the main measures Develop could be flexible for the Kitchen/Dining right opportunities and make things 4.85m x 3.41m (15ˊ11˝ x 11ˊ02˝) of success in any happen, fast.

Bedroom 3 WC / Dining 2.05m x 0.88m (6ˊ09˝ x 2ˊ11˝) development project.” Kitchen Our broker simply provided a

ST

WC

development appraisal, including plans, ensured the project was between the target GDV of £2m-£15m and, in exchange, received full funding covering land, build, stamp duty and soft costs.

Master Bedroom

Bedroom 2 Bathroom

First Floor Master Bedroom 4.89m x 2.70m* (16ˊ00˝ x 8ˊ10˝*) Bedroom 2 3.50m x 2.76m

(11ˊ06˝ x 9ˊ01˝)

Bedroom 3 3.01m x 2.22m

(9ˊ10˝ x 7ˊ03˝)

Bathroom 2.12m x 1.99m

(7ˊ00˝ x 6ˊ06˝)

developer keeping the lion’s share of the profits, allowing them to expand their operation over multiple sites.

Our developer Currently, the development is ahead Landing was delighted of schedule, with site set-up works completed and excavation and * Maximum measurement has been used. NB: All dimensions are guide and may vary from plot to plot that please check with sales advisor.

Go Develop In this case, funding of nearly £3.36m foundation works commencing. was provided to replace a dilapidated In a year’s time, there should be a would do All enquiries contact the selling agents:0121 749 7888 pub with 21 new homes and four supercharged profit for the developer the admin, apartments close to the University of partner. As always, Go Develop also Birmingham.

Planning permission rewards relationships with their Living Room VAT returns, has been granted, and the project brokers and introducers, offering high 2-4 Hurst Lane, Castle Bromwich, Birmingham, West Midlands, B34 7HR should take around 13 months. procurement fees.

Bedroom 2 valuations and E: castlebromwich@burchelledwards.co.uk Bathroom A new Go Develop SPV was set up Our developer was delighted that Go chasing of the same day to hold the project until Develop would be the one to do the it’s finished and sold, with a profit admin, VAT returns, valuations and solicitors Please note: and plans show a typical house type. The house type may be built in a range of elevational finishes using a variety of materials. Floor plansofand share contract for bothIllustration parties. On chasing solicitors and surveyors positions may vary from plot to plot. This is because we operate a policy of continuous improvement and we work within the needs – of he thenow Planning completion and sale ofwindow the property, has his Sunday evenings Authorities. Please ask your Sales Adviser for precise details of the finish and specifications of your chosen home. the profit is divided, usually with the back. He said: “Go Develop offer a

Ground Floor 16 | NACFB Magazine

Living Room 4.98m x 2.53m

one-stop, property development funding solution, with a straighttalking, joint venture partnership.

The team is great to deal with and simply ‘gets’ new build.”

Like 92% of Go Develop partners, our Midlands developer has returned with three further projects. These include two based in West Bromwich and the Jewellery Quarter which, together, will result in the development of over 160 flats. Our developer partner added: “I work only with the best people in order to deliver an exceptional project every time.”

Go Develop currently has over 1,000 units under construction and plan to reach £250m partner funding in the next 18 months.

First Floor

(16ˊ04˝ x 8ˊ03˝)

Master Bedroom harkerhomes 4.89m x 2.70m* (16ˊ00˝ x

8ˊ10˝*)

www.harkerhomes.co.uk

NACFB Magazine | 17

CASE STUDIES

Tracker BTL loan enables expat portfolio growth John Goodall CEO & co-founder Landbay

A

s an innovative P2P lender, Landbay knows that landlords, investors and brokers prize high returns and low costs above all else.

Recently, we were approached by a broker for buy-to-let finance for an expat who had been living abroad for 10 years. She was looking to buy her second buy-to-let property: a one-bed flat on the 10th floor of a 14-storey converted office building in Croydon.

This case was already complex by virtue of the property being on the 10th floor and the client, being an expat, was paid local currency. This limited the finance options available.

A further complication was that the landlord had already exchanged contracts on 22nd December, and the hard completion date was less than a month later, on 20th January.

If the finance wasn’t secured, the landlord would lose not only the property, but her deposit as well.

This would be quite the dampener on the Christmas season, so we were determined to help.

For landlords like this, our expat tracker product is the perfect solution.

We’ve automated our processes and tailored the programme specifically to expats, including the ability to secure a loan using six months’ worth of bank statements and six months of payslips in the country of origin.

The property was valued at £287,000, and the loan required was £200,900 at an LTV of 70%. The customer wanted a 10-year interest-only term product, and our expat tracker could offer Libor +4% with a 2% lender arrangement fee.

Despite the Christmas period and the constraints this placed on our availability, the mortgage was processed in just nine days. The completion, in total, took 19 working days, with the offer in principle being received in one working day and the legal work taking five working days, lengthened by solicitors’ offices being closed over Christmas.

While this case is exemplary, it’s not unusual. Supported by its dedicated intermediary website, Landbay is typically able to issue an offer in principle within 48 hours. The website provides brokers with a secure and intuitive platform to help them source mortgages on behalf of their buy-tolet clients and apply online. It also includes full applicant, property and

Case snapshot Property value: £287,000

Business-boosting loans up to £500,000 Fixed rate loans with no set up fees or early repayment charges

Loan amount: £200,900 LTV: 70% Rate: Tracker - 4.00% + LIBOR Term: 10 years interest only

Security may be required. Product fees may apply.

Over 18s only. Business turnover of up to £2 million.

Excludes refinance and Commercial Real Estate Finance.

Borrower: Individual Lender arrangement fee: 2% (£3,939.22) Mortgage payment: £718.22 pcm

borrower criteria, along with a detailed guide on how to apply, ensuring the process is quick, easy and secure.

The property portfolio key is another feature that allows our brokers to enter a detailed analysis of a landlord’s full portfolio in line with September’s PRA portfolio landlord changes.

Affordability ICR and stress tests are all already built into our tech-enabled underwriting platform, so portfolio landlords, and their brokers, will be able to use the same straightforward process to secure a loan as before.

Email us at brokerteam@natwest.com ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT. 18 | NACFB Magazine

CASE STUDIES

Tracker BTL loan enables expat portfolio growth John Goodall CEO & co-founder Landbay

A

s an innovative P2P lender, Landbay knows that landlords, investors and brokers prize high returns and low costs above all else.

Recently, we were approached by a broker for buy-to-let finance for an expat who had been living abroad for 10 years. She was looking to buy her second buy-to-let property: a one-bed flat on the 10th floor of a 14-storey converted office building in Croydon.

This case was already complex by virtue of the property being on the 10th floor and the client, being an expat, was paid local currency. This limited the finance options available.

A further complication was that the landlord had already exchanged contracts on 22nd December, and the hard completion date was less than a month later, on 20th January.

If the finance wasn’t secured, the landlord would lose not only the property, but her deposit as well.

This would be quite the dampener on the Christmas season, so we were determined to help.

For landlords like this, our expat tracker product is the perfect solution.

We’ve automated our processes and tailored the programme specifically to expats, including the ability to secure a loan using six months’ worth of bank statements and six months of payslips in the country of origin.

The property was valued at £287,000, and the loan required was £200,900 at an LTV of 70%. The customer wanted a 10-year interest-only term product, and our expat tracker could offer Libor +4% with a 2% lender arrangement fee.

Despite the Christmas period and the constraints this placed on our availability, the mortgage was processed in just nine days. The completion, in total, took 19 working days, with the offer in principle being received in one working day and the legal work taking five working days, lengthened by solicitors’ offices being closed over Christmas.

While this case is exemplary, it’s not unusual. Supported by its dedicated intermediary website, Landbay is typically able to issue an offer in principle within 48 hours. The website provides brokers with a secure and intuitive platform to help them source mortgages on behalf of their buy-tolet clients and apply online. It also includes full applicant, property and

Case snapshot Property value: £287,000

Business-boosting loans up to £500,000 Fixed rate loans with no set up fees or early repayment charges

Loan amount: £200,900 LTV: 70% Rate: Tracker - 4.00% + LIBOR Term: 10 years interest only

Security may be required. Product fees may apply.

Over 18s only. Business turnover of up to £2 million.

Excludes refinance and Commercial Real Estate Finance.

Borrower: Individual Lender arrangement fee: 2% (£3,939.22) Mortgage payment: £718.22 pcm

borrower criteria, along with a detailed guide on how to apply, ensuring the process is quick, easy and secure.

The property portfolio key is another feature that allows our brokers to enter a detailed analysis of a landlord’s full portfolio in line with September’s PRA portfolio landlord changes.

Affordability ICR and stress tests are all already built into our tech-enabled underwriting platform, so portfolio landlords, and their brokers, will be able to use the same straightforward process to secure a loan as before.

Email us at brokerteam@natwest.com ANY PROPERTY USED AS SECURITY, WHICH MAY INCLUDE YOUR HOME, MAY BE REPOSSESSED IF YOU DO NOT KEEP UP REPAYMENTS ON A MORTGAGE OR OTHER DEBT SECURED ON IT. 18 | NACFB Magazine

CASE STUDIES

CASE STUDIES

Asset finance boost for major festival stage I’ve been working in the credit and finance industry since the early ‘80s – when Glastonbury was just about the only globally known UK music festival – and this is one case study that I just had to share with the NACFB. Paul Burke Managing director Davenham Asset Finance

20 | NACFB Magazine

I

t was a very cold and frosty morning as I approached the client’s warehouse. It had obviously been around for a while and was surrounded by steel trusses of all types and sizes, with large steel stillages full of various brackets and stands.

“This is going to be an interesting credit,” I thought to myself, as Jim, my asset logistics specialist, approached me. He had suggested that I contacted this company as he’d dealt with all their transport/ logistic requirements for many years, and knew the assets very well.

I was lead into a small office and was introduced to Liz, one of the directors. From the moment I met her, I could see she had a desire and enthusiasm for what she, her business partner and the company did. They were seasoned pros and had been involved in the staging and event management industry for over 50 years collectively. They had worked on many high-profile events, tours and concerts, including

Michael Jackson, the Rolling Stones, Madonna and the Eagles, among other big names. They also worked on major ceremonies, including the Melbourne Commonwealth Games, the Salt Lake City Winter Olympics, the London 2012 Olympic Games and the 2014 Invictus Games. Even our local Manchester Commonwealth Games. A black book to die for.

So why had this established, successful company with a very experienced management team turned to Davenham Asset Finance?

In short, it’s because they’d been informed of our reputation of investing time and resource to understand the companies and the assets we fund, as well as listening to and working with the directors. In this case, Liz had won the contract to co-ordinate a new, bespoke stage at one of the UK’s biggest music festivals and needed the funds to build something revolutionary.

The high street banks didn’t want to get their hands (or wellington

boots) dirty, and didn’t even look at the business or its security.

On the face of it, Davenham was asked to raise finance on staging, but this was no ordinary staging: these were world-leading structures sought after by the top production companies.

We took the time to learn about the staging, their connected assets and the related engineering requirements, and could see that our client’s designs had incorporated load-bearing capabilities and other options – meaning they were far superior to alternatives on the market.

What was key for Davenham was to assess the value of the various stages and their components, and understand that many of the client’s previous stages had been built specifically for annual events.

This meant an ongoing contractual commitment to hire, highlighting future committed cash flows. We also needed to understand the flexibility of the equipment as it had all been

designed as modular, to be used in a number of ways to create different structures, similar to a Meccano kit.

Detailed discussions and research conducted by Davenham’s valuers confirmed there was material value in the staging and that there would be demand in the market if it ever needed to be sold. A full understanding of the complex erection processes then had to be confirmed, and we achieved this through access to the detailed engineering drawings and the on-the-ground practical experience of our specialist. Jim had seen the client’s previous staging being erected and taken down on numerous occasions and, therefore, had detailed, hands-on knowledge.

Davenham now knew it had an asset with significant value, access to the engineering drawings (which in themselves represented a significant piece of intellectual property), and a company and management team we believed in. We collectively discussed the risks they were taking and how

they would plan for any exit should the need arise and, as a result, the perfect security package was brought together through careful structuring and legal documentation through a bespoke refinance package.

Our client, Liz, said: “It has been absolutely refreshing to work with an alternative finance provider who literally rolled their sleeves up and took the time to understand our business. Asset finance has proven to be extremely successful for our staging and temporary structure business, and we are now continuing to work with Paul and his team on the growth of our company.”

Over the years, myself and my team have worked hard to establish the Davenham brand. As a result, we are now strongly associated with a personalised approach to supporting our brokers and clients as part of tailored asset finance solutions, both for everyday assets and those out of the ordinary.

NACFB Magazine | 21

CASE STUDIES

CASE STUDIES

Asset finance boost for major festival stage I’ve been working in the credit and finance industry since the early ‘80s – when Glastonbury was just about the only globally known UK music festival – and this is one case study that I just had to share with the NACFB. Paul Burke Managing director Davenham Asset Finance

20 | NACFB Magazine

I

t was a very cold and frosty morning as I approached the client’s warehouse. It had obviously been around for a while and was surrounded by steel trusses of all types and sizes, with large steel stillages full of various brackets and stands.

“This is going to be an interesting credit,” I thought to myself, as Jim, my asset logistics specialist, approached me. He had suggested that I contacted this company as he’d dealt with all their transport/ logistic requirements for many years, and knew the assets very well.

I was lead into a small office and was introduced to Liz, one of the directors. From the moment I met her, I could see she had a desire and enthusiasm for what she, her business partner and the company did. They were seasoned pros and had been involved in the staging and event management industry for over 50 years collectively. They had worked on many high-profile events, tours and concerts, including

Michael Jackson, the Rolling Stones, Madonna and the Eagles, among other big names. They also worked on major ceremonies, including the Melbourne Commonwealth Games, the Salt Lake City Winter Olympics, the London 2012 Olympic Games and the 2014 Invictus Games. Even our local Manchester Commonwealth Games. A black book to die for.

So why had this established, successful company with a very experienced management team turned to Davenham Asset Finance?

In short, it’s because they’d been informed of our reputation of investing time and resource to understand the companies and the assets we fund, as well as listening to and working with the directors. In this case, Liz had won the contract to co-ordinate a new, bespoke stage at one of the UK’s biggest music festivals and needed the funds to build something revolutionary.

The high street banks didn’t want to get their hands (or wellington

boots) dirty, and didn’t even look at the business or its security.

On the face of it, Davenham was asked to raise finance on staging, but this was no ordinary staging: these were world-leading structures sought after by the top production companies.

We took the time to learn about the staging, their connected assets and the related engineering requirements, and could see that our client’s designs had incorporated load-bearing capabilities and other options – meaning they were far superior to alternatives on the market.

What was key for Davenham was to assess the value of the various stages and their components, and understand that many of the client’s previous stages had been built specifically for annual events.

This meant an ongoing contractual commitment to hire, highlighting future committed cash flows. We also needed to understand the flexibility of the equipment as it had all been

designed as modular, to be used in a number of ways to create different structures, similar to a Meccano kit.

Detailed discussions and research conducted by Davenham’s valuers confirmed there was material value in the staging and that there would be demand in the market if it ever needed to be sold. A full understanding of the complex erection processes then had to be confirmed, and we achieved this through access to the detailed engineering drawings and the on-the-ground practical experience of our specialist. Jim had seen the client’s previous staging being erected and taken down on numerous occasions and, therefore, had detailed, hands-on knowledge.

Davenham now knew it had an asset with significant value, access to the engineering drawings (which in themselves represented a significant piece of intellectual property), and a company and management team we believed in. We collectively discussed the risks they were taking and how

they would plan for any exit should the need arise and, as a result, the perfect security package was brought together through careful structuring and legal documentation through a bespoke refinance package.

Our client, Liz, said: “It has been absolutely refreshing to work with an alternative finance provider who literally rolled their sleeves up and took the time to understand our business. Asset finance has proven to be extremely successful for our staging and temporary structure business, and we are now continuing to work with Paul and his team on the growth of our company.”

Over the years, myself and my team have worked hard to establish the Davenham brand. As a result, we are now strongly associated with a personalised approach to supporting our brokers and clients as part of tailored asset finance solutions, both for everyday assets and those out of the ordinary.

NACFB Magazine | 21

CASE STUDIES

Overcoming legal challenges for £26m landmark project Zorin Finance proudly assisted with the purchase, conversion and extension of an existing eight-storey office building in New Malden to provide 93 residential flats, including 11 shared ownership units.

CASE STUDIES

V

ision Homes is a design- and customer-led development company which was started

by Parma Sulh in 2001. His idea was to specialize in developing small, residential new builds, mews houses and gated developments for modern, urban living – in line with the kind of schemes Zorin likes to get involved with.

over the past few years by Matterhorn New Malden Ltd, in conjunction with their masterplan architect, Assael Architecture.

The £26m loan to developer Vision Homes will fund the construction of this modern development scheme in South West London under the jurisdiction of the Royal Borough

Another challenge we faced was a complicated Section 106 agreement, relating to a license for car parking spaces on an adjacent site owned by the vendor. The associated

The key technical risk associated with the scheme was the structural condition of the existing building, and its ability to accommodate additional floors and the proposed balconies.

the ground floor is likely to be occupied during construction.

Z

orin’s loan origination and credit risk team played an active role from beginning to end by meeting the developer initially and getting to know the site in great detail. The planned exit route would be for the private units to be sold on the open market, with the remaining affordable units to be purchased by a housing association.

This was an exceptionally difficult deal with a lot of legal encounters – however, the entire lending process took only six weeks to complete, despite all the challenges, and Zorin was able to provide a loan of over £26m on a 22-month term.

The development now has the potential to be a landmark scheme in New Malden as the price point of the majority of the private flats is within the Help to Buy scheme band, which will attract local buyers.

Parma Sulh, CEO of Vision Homes, said: “Zorin Finance offered us an attractive borrowing proposition, based on their expert knowledge of the property sector, flexibility, transparency and ability to move swiftly. It is clear to us that alternative lenders such as Zorin offer a crucial way for housebuilders to realize their developments under challenging market conditions and deliver important new homes for Britain.”

Zorin was founded in 2011 by entrepreneur Luke Townsend as a response to the lack of development finance being made available by established high street banks, and a perceived deterioration in the service levels they were providing.

of Kingston upon Thames. The conversion work encompasses basement, ground floor, main entrance core and escape stair areas.

The building that Vision Homes intends to carry out the office-toresidential conversion on has not been fully occupied for the past seven years. The proposals for the scheme have been progressed

22 | NACFB Magazine

lawyers, Memery Crystal, altered this agreement in conjunction with the developer, the seller and Kingston Borough Council in order to make the development fundable.

There was also the technical risk associated with the logistics of managing the construction works with tenants in occupation. However, the developer advised that only

Zorin is supporting the delivery of new homes in the UK which otherwise would not be built without new, alternative sources of financing for SME housebuilders, given the lack of appetite to lend by mainstream banks in the residential development market.

Katy Katani Associate director Zorin Finance

NACFB Magazine | 23

CASE STUDIES

Overcoming legal challenges for £26m landmark project Zorin Finance proudly assisted with the purchase, conversion and extension of an existing eight-storey office building in New Malden to provide 93 residential flats, including 11 shared ownership units.

CASE STUDIES

V

ision Homes is a design- and customer-led development company which was started

by Parma Sulh in 2001. His idea was to specialize in developing small, residential new builds, mews houses and gated developments for modern, urban living – in line with the kind of schemes Zorin likes to get involved with.

over the past few years by Matterhorn New Malden Ltd, in conjunction with their masterplan architect, Assael Architecture.

The £26m loan to developer Vision Homes will fund the construction of this modern development scheme in South West London under the jurisdiction of the Royal Borough

Another challenge we faced was a complicated Section 106 agreement, relating to a license for car parking spaces on an adjacent site owned by the vendor. The associated

The key technical risk associated with the scheme was the structural condition of the existing building, and its ability to accommodate additional floors and the proposed balconies.

the ground floor is likely to be occupied during construction.

Z

orin’s loan origination and credit risk team played an active role from beginning to end by meeting the developer initially and getting to know the site in great detail. The planned exit route would be for the private units to be sold on the open market, with the remaining affordable units to be purchased by a housing association.

This was an exceptionally difficult deal with a lot of legal encounters – however, the entire lending process took only six weeks to complete, despite all the challenges, and Zorin was able to provide a loan of over £26m on a 22-month term.

The development now has the potential to be a landmark scheme in New Malden as the price point of the majority of the private flats is within the Help to Buy scheme band, which will attract local buyers.

Parma Sulh, CEO of Vision Homes, said: “Zorin Finance offered us an attractive borrowing proposition, based on their expert knowledge of the property sector, flexibility, transparency and ability to move swiftly. It is clear to us that alternative lenders such as Zorin offer a crucial way for housebuilders to realize their developments under challenging market conditions and deliver important new homes for Britain.”

Zorin was founded in 2011 by entrepreneur Luke Townsend as a response to the lack of development finance being made available by established high street banks, and a perceived deterioration in the service levels they were providing.

of Kingston upon Thames. The conversion work encompasses basement, ground floor, main entrance core and escape stair areas.

The building that Vision Homes intends to carry out the office-toresidential conversion on has not been fully occupied for the past seven years. The proposals for the scheme have been progressed

22 | NACFB Magazine

lawyers, Memery Crystal, altered this agreement in conjunction with the developer, the seller and Kingston Borough Council in order to make the development fundable.

There was also the technical risk associated with the logistics of managing the construction works with tenants in occupation. However, the developer advised that only

Zorin is supporting the delivery of new homes in the UK which otherwise would not be built without new, alternative sources of financing for SME housebuilders, given the lack of appetite to lend by mainstream banks in the residential development market.

Katy Katani Associate director Zorin Finance

NACFB Magazine | 23

Cover Story | feature

Commercial temperatures rise The speedy recovery of the UK property market since the referendum

By Beth Fisher, editor, Bridging & Commercial

Cover Story | feature

Commercial temperatures rise The speedy recovery of the UK property market since the referendum

By Beth Fisher, editor, Bridging & Commercial

COVER STORY

COVER STORY

In the City, Asian investors continued to be the most prominent, making up 50% of turnover in H1 2017, with an average deal size of £147.39m.

European and UK investors were responsible for 25% and 16% respectively, while US and Middle Eastern investment was at just 4% each.

Last year’s EU referendum verdict cast a shadow over the UK’s commercial property market. Investor confidence waned, resulting in a number of property funds temporarily suspending trading amid an outflow of funding. Almost 18 months and a snap election later, the shadow finally seems to be fading.

On the other hand, William believed that activity between domestic and overseas investors was currently split fairly evenly.

“One of the interesting aspects postreferendum is that while overall investment slowed during Q3/Q4 2016, the share from overseas buyers increased.”

Jon Salisbury, managing director at Ortus Secured Finance, said the lender had continued to receive lots of requests for finance from UK and overseas investors.

“The key motivation behind most transactions continues to be dealspecific opportunities or upside, as opposed to investors taking views on the economic landscape.”

T

he volume of investment in the UK commercial market for the first half of 2017 stood at a colossal £27.2bn, 1% higher than the same period in 2016, according to Savills. UK offices attracted 39% of the total investment.

In the same period, commercial property investment in the City of London reached £4.98bn – a 17% increase on H1 2016. This could be attributed to the strong demand for ‘trophy assets’, with 64 deals transacted in the first six months of the year, at an average lot size of £77.8m. Savills claimed it was almost certain that the 2017 total turnover would surpass that of 2016.

William Matthews, partner at Knight Frank, explained: “[There] was a clear slowdown in activity directly after the referendum and, broadly speaking, there was 25bps outward movement in yield across most main sectors, equating to a roughly 5% fall in values..

“Open-ended real estate funds were particularly badly hit – they saw significant outflows of investor funds in the wake of the EU referendum, causing some to need to sell assets to meet redemptions.

26 | NACFB Magazine

“However, by the end of Q3, most fund redemptions had slowed, and values in the market were beginning to stabilise as investment activity picked up again (helped by the decline in the value of sterling).

“2017 has been much stronger: the scale of investment seen in the first half of 2017 was beaten only by that recorded in 2007 and 2015, and 2017 looks on track to beat last year in terms of overall volume.”

Ludo Mackenzie, head of commercial at Octopus Property, agreed that appetite had seen a recovery since the referendum: “Investment volumes suffered in the months immediately before and after the referendum, but have bounced back since last autumn.

“There’s a real variety of domestic and international investors at present, all the more so as a result of the weaker pound.”

Of overseas investors, American institutions have become particularly active, Marcus explained, possibly due to US investors seeing the UK as a safe bet at a time of global political and economic uncertainty.

“As has been the case for a number of years now, a lot of the inflows into UK commercial property are coming from the Far East, but really there are investors from all around the world.”

“Smaller investors in the sub-institutional market appear to be unperturbed, judging by the sales volumes and success rates in the auction rooms.”

Mat Oakley, director of European commercial research at Savills, believed that non-domestic investors were the most active buyers in the UK commercial property market this year, and, within that group, the most active buyers had been from Asia Pacific, the US and mainland Europe.

Who is investing?

Marcus Higgins, director of property consultancy and surveyors, Naismiths, said the question really should be who wasn’t investing in UK commercial property.

“Private investors from Hong Kong and the Middle East have been the most active new entrants since the EU referendum, with the weakening of sterling definitely playing a part in this,” Mat added.

UK hotspots The central London market has completed a number of very large office transactions this year, including the acquisition of the Leadenhall Building (known as the Cheesegrater) for £1.15bn, 2 and 3 Bankside for £310m and the sale of 67 Lombard Street for £129.3m.

“The office sector is the most heavily traded area of the market and the value of transactions is heavily skewed to central London,” said Ludo.

“However, if trophy hunters from overseas are excluded, [investors are] more interested in the outer London zones and the regions where there is perceived greater value for money.”

William said this had prompted other London property owners to consider bringing forward buildings for sale.

“In the longer term, we see scope for greater investor interest in the UK’s key regional office markets, where much regeneration is happening, and from an occupier perspective, there remains a shortage of good quality, modern stock.”

Darrell Walker, head of sales - second charge and commercial at OneSavings Bank, added that the bank regularly saw ‘micro pockets’ pop up across

the UK – however, these were driven more by the type of property in question than the location.

There are two schools of thought: the first is that the market is in bubble territory; the second is you cannot afford not to be exposed

“Good transport links are often a common driver in this sector,” he added.

Marcus stated that almost every major city outside London was a hotspot, with Bristol, Birmingham and Manchester at the front of the peloton.

“There’s still a considerable amount of activity in London, clearly, but in relative terms, it’s the cities outside the M25 that have seen the greatest levels of activity over the past year or so.

“I’d expect this trend to continue in the short to medium term.”

What is driving demand?

Mat explained that the strongest demand was for prime assets with long-term leases and secure income streams.

“This favours London offices and those in the key regional cities, as well as logistics in the Midlands and around the M25.

“This is a reflection of a global hunt for income security, and the comparatively safe income that the UK commercial lease offers.”

Mat believes that this has also caused a surge in investor interest in alternative sectors such as pubs, the private rented sector and student housing.

According to Savills, 68,000 student beds traded in 2016 totalling £4.5bn, however, it expected this to rise to 75,000 beds trading for £5.3bn in 2017 – a rise of 17% year-on-year.

“Student accommodation remains the flavour of the day for many commercial property investors, with schemes cropping up in countless university towns and cities, from Glasgow and Durham to Leicester and Birmingham,” Marcus added.

Permitted development rights (PDR) are also driving the office-toresi market, Marcus claimed, with a percentage of these projects ending up as student accommodation.

“If there’s a fly in the ointment with PDRs, it’s that a growing number of investors are seeking to enhance their developments, which can mean a lot more time and red tape as the necessary planning permission is sought.

NACFB Magazine | 27

COVER STORY

COVER STORY

In the City, Asian investors continued to be the most prominent, making up 50% of turnover in H1 2017, with an average deal size of £147.39m.

European and UK investors were responsible for 25% and 16% respectively, while US and Middle Eastern investment was at just 4% each.

Last year’s EU referendum verdict cast a shadow over the UK’s commercial property market. Investor confidence waned, resulting in a number of property funds temporarily suspending trading amid an outflow of funding. Almost 18 months and a snap election later, the shadow finally seems to be fading.

On the other hand, William believed that activity between domestic and overseas investors was currently split fairly evenly.

“One of the interesting aspects postreferendum is that while overall investment slowed during Q3/Q4 2016, the share from overseas buyers increased.”

Jon Salisbury, managing director at Ortus Secured Finance, said the lender had continued to receive lots of requests for finance from UK and overseas investors.

“The key motivation behind most transactions continues to be dealspecific opportunities or upside, as opposed to investors taking views on the economic landscape.”

T

he volume of investment in the UK commercial market for the first half of 2017 stood at a colossal £27.2bn, 1% higher than the same period in 2016, according to Savills. UK offices attracted 39% of the total investment.

In the same period, commercial property investment in the City of London reached £4.98bn – a 17% increase on H1 2016. This could be attributed to the strong demand for ‘trophy assets’, with 64 deals transacted in the first six months of the year, at an average lot size of £77.8m. Savills claimed it was almost certain that the 2017 total turnover would surpass that of 2016.

William Matthews, partner at Knight Frank, explained: “[There] was a clear slowdown in activity directly after the referendum and, broadly speaking, there was 25bps outward movement in yield across most main sectors, equating to a roughly 5% fall in values..

“Open-ended real estate funds were particularly badly hit – they saw significant outflows of investor funds in the wake of the EU referendum, causing some to need to sell assets to meet redemptions.

26 | NACFB Magazine

“However, by the end of Q3, most fund redemptions had slowed, and values in the market were beginning to stabilise as investment activity picked up again (helped by the decline in the value of sterling).

“2017 has been much stronger: the scale of investment seen in the first half of 2017 was beaten only by that recorded in 2007 and 2015, and 2017 looks on track to beat last year in terms of overall volume.”

Ludo Mackenzie, head of commercial at Octopus Property, agreed that appetite had seen a recovery since the referendum: “Investment volumes suffered in the months immediately before and after the referendum, but have bounced back since last autumn.

“There’s a real variety of domestic and international investors at present, all the more so as a result of the weaker pound.”

Of overseas investors, American institutions have become particularly active, Marcus explained, possibly due to US investors seeing the UK as a safe bet at a time of global political and economic uncertainty.

“As has been the case for a number of years now, a lot of the inflows into UK commercial property are coming from the Far East, but really there are investors from all around the world.”

“Smaller investors in the sub-institutional market appear to be unperturbed, judging by the sales volumes and success rates in the auction rooms.”

Mat Oakley, director of European commercial research at Savills, believed that non-domestic investors were the most active buyers in the UK commercial property market this year, and, within that group, the most active buyers had been from Asia Pacific, the US and mainland Europe.

Who is investing?

Marcus Higgins, director of property consultancy and surveyors, Naismiths, said the question really should be who wasn’t investing in UK commercial property.

“Private investors from Hong Kong and the Middle East have been the most active new entrants since the EU referendum, with the weakening of sterling definitely playing a part in this,” Mat added.

UK hotspots The central London market has completed a number of very large office transactions this year, including the acquisition of the Leadenhall Building (known as the Cheesegrater) for £1.15bn, 2 and 3 Bankside for £310m and the sale of 67 Lombard Street for £129.3m.

“The office sector is the most heavily traded area of the market and the value of transactions is heavily skewed to central London,” said Ludo.

“However, if trophy hunters from overseas are excluded, [investors are] more interested in the outer London zones and the regions where there is perceived greater value for money.”

William said this had prompted other London property owners to consider bringing forward buildings for sale.

“In the longer term, we see scope for greater investor interest in the UK’s key regional office markets, where much regeneration is happening, and from an occupier perspective, there remains a shortage of good quality, modern stock.”

Darrell Walker, head of sales - second charge and commercial at OneSavings Bank, added that the bank regularly saw ‘micro pockets’ pop up across

the UK – however, these were driven more by the type of property in question than the location.

There are two schools of thought: the first is that the market is in bubble territory; the second is you cannot afford not to be exposed

“Good transport links are often a common driver in this sector,” he added.

Marcus stated that almost every major city outside London was a hotspot, with Bristol, Birmingham and Manchester at the front of the peloton.

“There’s still a considerable amount of activity in London, clearly, but in relative terms, it’s the cities outside the M25 that have seen the greatest levels of activity over the past year or so.

“I’d expect this trend to continue in the short to medium term.”

What is driving demand?

Mat explained that the strongest demand was for prime assets with long-term leases and secure income streams.

“This favours London offices and those in the key regional cities, as well as logistics in the Midlands and around the M25.

“This is a reflection of a global hunt for income security, and the comparatively safe income that the UK commercial lease offers.”

Mat believes that this has also caused a surge in investor interest in alternative sectors such as pubs, the private rented sector and student housing.

According to Savills, 68,000 student beds traded in 2016 totalling £4.5bn, however, it expected this to rise to 75,000 beds trading for £5.3bn in 2017 – a rise of 17% year-on-year.

“Student accommodation remains the flavour of the day for many commercial property investors, with schemes cropping up in countless university towns and cities, from Glasgow and Durham to Leicester and Birmingham,” Marcus added.

Permitted development rights (PDR) are also driving the office-toresi market, Marcus claimed, with a percentage of these projects ending up as student accommodation.

“If there’s a fly in the ointment with PDRs, it’s that a growing number of investors are seeking to enhance their developments, which can mean a lot more time and red tape as the necessary planning permission is sought.

NACFB Magazine | 27

COVER STORY

COVER STORY

“It just makes the deliverability of projects that little bit harder.”

due to changing consumer behaviour and the rise of internet shopping.

Marcus explained that the surveyor was also seeing a lot of transactional bank customers taking out loans and building their own premises, rather than renting them.

“…The growth of online retailers has led to a requirement for more warehousing space in some areas and perhaps an over-supply of retail space in other areas,” said Emma Cox, sales director of commercial mortgages at Shawbrook.

“One reason for this is that there’s simply not enough suitable property available to rent; the other is that it can be far cheaper to develop a purposebuilt property via a commercial mortgage than rent longer term.

“Where retail usage has fallen there are many examples of changes of use to restaurants or cafes, for example, rather than a property becoming vacant.”

schemes that offer a consumer experience) and secondary retail which looks increasingly obsolete,” Ludo explained.

“The other end of this seesaw is the logistics sector, which has seen incredible rental growth.

“Investors are looking to lock into this structural shift and are paying yields that require rents to keep growing.

“The businesses doing this aren’t office-based companies but light industrial firms that need warehousing, storage and manufacturing space.”

According to Cushman & Wakefield’s ‘UK Shopping Centres: Dead or Alive?’ report, more retailers are looking for larger units in prime positions to serve as flagship stores.

“Much like the internet giants (Amazon, Facebook, Alphabet, etc), there are two schools of thought: the first is that the market is overpriced and in bubble territory; the second is that you cannot afford not to be exposed and that you should buy in at all costs.”

The part of the commercial market most under threat appears to be retail,

“There is an increasing polarisation between the best retail (dominant

The commercial market in 2018 “For as long as the yield gap remains as

28 | NACFB Magazine

Marcus concluded that Brexit did not have the impact some thought it would and had resulted in more transactions as sterling weakness attracted overseas investors.

Brian Rubins, director at Alternative Bridging Corporation Limited, said that the property industry and those who financed it continually reacted to change.

“All told, Brexit has resulted in upward, rather than downward pressure on prices at this current moment in time.

“Not to do so, they would disappear in a cloud of dust. However, Brexit is different – it is the long, lingering death by a thousand cuts.

“The effect on property finance? Our forecast - nothing good. But property finance is a big subject involving huge numbers and it is diverse; home loans, commercial investments, business premises, and development. All have different dynamics but one thing has been common to all – a flight to quality and a reduction in activity.

“Going forward, we are where we are and nothing is likely to improve until Brexit is behind us.

“Saying that, I expect the market to continue to grow, especially outside of the capital as that’s where investors see more value and growth.

Retail Investment Volumes (£ billions) Source JLL 14 12 10 8 6 4 2 0

“If it is deemed to be a ‘good Brexit’, markets will recover as they always have but, if not, values will slide and lenders will be even more selective than they are now.”

of next year. In that regard, to make a prediction [for 2018] is almost foolhardy.

“What’s important is that the market grows steadily and does not overheat.”

“There’s a lot going on in the world at present and things are changing almost by the day. In the UK alone, we could have a new prime minister by the spring

Volume (£ bns)

The part of the commercial market most under threat appears to be retail, due to changing consumer behaviour

wide as it is, and barring a geopolitical shock to the system, it is hard to see commercial property values moving materially in either direction,” Ludo added.

2012

2013

High Street

2014

2015

Retail Warehousing Park Supermarkets

2016

H12017

Shopping Centre

Mixed Portfolios

NACFB Magazine | 29

COVER STORY

COVER STORY

“It just makes the deliverability of projects that little bit harder.”

due to changing consumer behaviour and the rise of internet shopping.

Marcus explained that the surveyor was also seeing a lot of transactional bank customers taking out loans and building their own premises, rather than renting them.

“…The growth of online retailers has led to a requirement for more warehousing space in some areas and perhaps an over-supply of retail space in other areas,” said Emma Cox, sales director of commercial mortgages at Shawbrook.

“One reason for this is that there’s simply not enough suitable property available to rent; the other is that it can be far cheaper to develop a purposebuilt property via a commercial mortgage than rent longer term.

“Where retail usage has fallen there are many examples of changes of use to restaurants or cafes, for example, rather than a property becoming vacant.”

schemes that offer a consumer experience) and secondary retail which looks increasingly obsolete,” Ludo explained.

“The other end of this seesaw is the logistics sector, which has seen incredible rental growth.

“Investors are looking to lock into this structural shift and are paying yields that require rents to keep growing.

“The businesses doing this aren’t office-based companies but light industrial firms that need warehousing, storage and manufacturing space.”

According to Cushman & Wakefield’s ‘UK Shopping Centres: Dead or Alive?’ report, more retailers are looking for larger units in prime positions to serve as flagship stores.

“Much like the internet giants (Amazon, Facebook, Alphabet, etc), there are two schools of thought: the first is that the market is overpriced and in bubble territory; the second is that you cannot afford not to be exposed and that you should buy in at all costs.”

The part of the commercial market most under threat appears to be retail,

“There is an increasing polarisation between the best retail (dominant

The commercial market in 2018 “For as long as the yield gap remains as

28 | NACFB Magazine

Marcus concluded that Brexit did not have the impact some thought it would and had resulted in more transactions as sterling weakness attracted overseas investors.

Brian Rubins, director at Alternative Bridging Corporation Limited, said that the property industry and those who financed it continually reacted to change.

“All told, Brexit has resulted in upward, rather than downward pressure on prices at this current moment in time.

“Not to do so, they would disappear in a cloud of dust. However, Brexit is different – it is the long, lingering death by a thousand cuts.

“The effect on property finance? Our forecast - nothing good. But property finance is a big subject involving huge numbers and it is diverse; home loans, commercial investments, business premises, and development. All have different dynamics but one thing has been common to all – a flight to quality and a reduction in activity.

“Going forward, we are where we are and nothing is likely to improve until Brexit is behind us.

“Saying that, I expect the market to continue to grow, especially outside of the capital as that’s where investors see more value and growth.

Retail Investment Volumes (£ billions) Source JLL 14 12 10 8 6 4 2 0

“If it is deemed to be a ‘good Brexit’, markets will recover as they always have but, if not, values will slide and lenders will be even more selective than they are now.”

of next year. In that regard, to make a prediction [for 2018] is almost foolhardy.

“What’s important is that the market grows steadily and does not overheat.”

“There’s a lot going on in the world at present and things are changing almost by the day. In the UK alone, we could have a new prime minister by the spring

Volume (£ bns)

The part of the commercial market most under threat appears to be retail, due to changing consumer behaviour

wide as it is, and barring a geopolitical shock to the system, it is hard to see commercial property values moving materially in either direction,” Ludo added.

2012

2013

High Street

2014

2015

Retail Warehousing Park Supermarkets

2016

H12017

Shopping Centre

Mixed Portfolios

NACFB Magazine | 29

Patron | profile

Reditum Capital – a business partner that sees things differently

Tim Mycock Development director Reditum Capital

At Reditum Capital, we spot the opportunities others don’t. Our focus is on asset values, not borrower covenants, and so we see a project’s full potential.

30 | NACFB Magazine

W

e’re also committed to upside participation through a tailored mix of debt, mezzanine and equity financing.

Reditum Capital is on a mission to provide fast, tailored funding for projects with potential. We’re property experts at heart, with a senior team who were all borrowers and developers first, having arranged over £350m of loans around the world over the last five years. However, we don’t just focus on property finance. As well as bespoke solutions for property development, we’ll also provide funds for alternative assets such as vehicles, rare art and aircrafts, and business funding such as invoice discounting and VAT facilities.

We understand the difficulties investors face when lenders don’t

see a project’s full potential. Taking an agile approach to lending, we dispense with exhaustive lists of criteria and instead consider each project on its individual merits. We assess the value of an asset rather than the covenants of the borrower, which allows us to consider the deals other lenders may reject.

Specialising in delivering a fast turnaround for complex funding scenarios, our goal is to help our clients overcome financial hurdles and bring opportunities to fruition.

Once our legal team receives all the information for borrowers and this is approved, we can close the transaction within five days. What’s more, we don’t just provide funding and then disappear – we pride ourselves on building long-term relationships with all our clients and will be there with you throughout the

process. As we provide equity, as well as debt financing, we act as a genuine business partner and have as much investment in the success of your project as you do.

Our people Founder Mark Stephen began his career in the property and investment marketplace over 15 years ago, and launched Reditum Capital in 2013.

With the expertise of Tim Mycock, business development director, and our team of analysts, we’ve arranged over £350m of funding for real estate and asset-backed transactions in the UK, Europe and around the world since then. Having previously worked as borrowers and developers, our team has a unique advantage in having experienced the issues facing investors firsthand and having a thorough understanding of the market.

Reditum in the field A unique property situated in Liverpool’s UNESCO World Heritage waterfront, this project first caught the eye of our team due to its fantastic location and the nature of the development, as well as the obvious marketing opportunities for the borrower. The project GDV was £22,260,000 and the gross loan amount was £6,321,000 with a term of eight months.

Our client used the property as their primary security for the loan to buy it. They offered two items of unencumbered, third party commercial property as additional security. We were able to lend at a higher LTV than usual as our funding went towards the acquisition of the building, while the borrower funded the development. We also offered flexible repayment terms, which

meant the borrower could use the proceeds from apartment sales to complete the construction.

Some of our other successful projects include a loan facility to buy a 2005 Bombardier Challenger 604 aircraft for an international aircraft leasing company based in the Cayman Islands, and a bespoke development and bridging facility for a commercial-to-residential property conversion in Heathrow.

Our projects are diverse because we have no fixed lending criteria, and loan amounts can range from £0.5m to £20m. If you have a unique opportunity that requires fast, flexible and tailored funding, it’s time to talk to a financing partner that sees things differently.

NACFB Magazine | 31

Patron | profile

Reditum Capital – a business partner that sees things differently

Tim Mycock Development director Reditum Capital

At Reditum Capital, we spot the opportunities others don’t. Our focus is on asset values, not borrower covenants, and so we see a project’s full potential.

30 | NACFB Magazine

W

e’re also committed to upside participation through a tailored mix of debt, mezzanine and equity financing.

Reditum Capital is on a mission to provide fast, tailored funding for projects with potential. We’re property experts at heart, with a senior team who were all borrowers and developers first, having arranged over £350m of loans around the world over the last five years. However, we don’t just focus on property finance. As well as bespoke solutions for property development, we’ll also provide funds for alternative assets such as vehicles, rare art and aircrafts, and business funding such as invoice discounting and VAT facilities.

We understand the difficulties investors face when lenders don’t

see a project’s full potential. Taking an agile approach to lending, we dispense with exhaustive lists of criteria and instead consider each project on its individual merits. We assess the value of an asset rather than the covenants of the borrower, which allows us to consider the deals other lenders may reject.

Specialising in delivering a fast turnaround for complex funding scenarios, our goal is to help our clients overcome financial hurdles and bring opportunities to fruition.

Once our legal team receives all the information for borrowers and this is approved, we can close the transaction within five days. What’s more, we don’t just provide funding and then disappear – we pride ourselves on building long-term relationships with all our clients and will be there with you throughout the

process. As we provide equity, as well as debt financing, we act as a genuine business partner and have as much investment in the success of your project as you do.

Our people Founder Mark Stephen began his career in the property and investment marketplace over 15 years ago, and launched Reditum Capital in 2013.

With the expertise of Tim Mycock, business development director, and our team of analysts, we’ve arranged over £350m of funding for real estate and asset-backed transactions in the UK, Europe and around the world since then. Having previously worked as borrowers and developers, our team has a unique advantage in having experienced the issues facing investors firsthand and having a thorough understanding of the market.

Reditum in the field A unique property situated in Liverpool’s UNESCO World Heritage waterfront, this project first caught the eye of our team due to its fantastic location and the nature of the development, as well as the obvious marketing opportunities for the borrower. The project GDV was £22,260,000 and the gross loan amount was £6,321,000 with a term of eight months.

Our client used the property as their primary security for the loan to buy it. They offered two items of unencumbered, third party commercial property as additional security. We were able to lend at a higher LTV than usual as our funding went towards the acquisition of the building, while the borrower funded the development. We also offered flexible repayment terms, which

meant the borrower could use the proceeds from apartment sales to complete the construction.

Some of our other successful projects include a loan facility to buy a 2005 Bombardier Challenger 604 aircraft for an international aircraft leasing company based in the Cayman Islands, and a bespoke development and bridging facility for a commercial-to-residential property conversion in Heathrow.

Our projects are diverse because we have no fixed lending criteria, and loan amounts can range from £0.5m to £20m. If you have a unique opportunity that requires fast, flexible and tailored funding, it’s time to talk to a financing partner that sees things differently.

NACFB Magazine | 31

Ask | the expert Your questions answered by the most knowledgeable industry insiders

Calling all Property Professionals… we can do it for you!

Representing the finance and banking industry Jeff Longhurst, head of commercial, invoice finance and asset-based lending at UK Finance (formerly of the Asset Based Finance Association) on the formation of the new trade association representing the finance and banking industry in the UK

WE PROVIDE FUNDS FOR...

CAPITAL RAISING

DEVELOPMENT FINANCE

REFINANCING EXISTING PORTFOLIOS EXIT AN EXISTING BRIDGE

REFURBISHMENT

Q A

What is UK Finance?

UK Finance is a new trade association launched on 1st July 2017 to represent the finance and banking industry in the UK. It brings together many of the activities undertaken by my former organisation – the Asset Based Finance Association (ABFA) – with those of the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payments-related services.

Q A

What are the association’s objectives?

The objectives of UK Finance are bold: to help our members and stakeholders build customer trust, facilitate appropriate industry-wide collaboration and work constructively with policy makers and regulators in the UK, EU and at a global level on financial services regulation, at all times seeking to ensure that the UK retains its position as a global leader in financial services.

32 | NACFB Magazine

The expectations of consumers of financial services are fast evolving. This is the case whether they are individuals or families, sole traders, SMEs or larger businesses.

The boundaries between different financial services have become blurred and one of the industry’s key challenges is to ensure that the products and services available reflect and respond to the needs of all customers.

Q

Is there a risk that more alternative voices will get drowned out by the big banks working with UK Finance?

A

It is the diversity within the UK Finance membership that’s one of the organisation’s real strengths. The governance of the whole organisation has been designed to ensure that the voices of the full range of products and institutions are not only protected, but enhanced. Where the organisation can speak with one voice, it will do so – and will do so loudly and clearly – but UK Finance is also very comfortable with a plurality of views and will put them forward based on evidence provided.

The unique perspective and voice of the industry I come from – invoice finance and asset-based lending – will be represented within UK Finance by a

dedicated product and service board and the ABFA’s membership has come across into this. The ABFA’s work across education and training, policy development and with key stakeholders, such as the NACFB, continues in UK Finance.

PURCHASE

AUCTION FINANCE

Q

In later years, the ABFA developed a big focus on standards. What is happening with the ABFA’s Standards Framework?

A

Promoting and enhancing standards and best practice will be a key focus for UK Finance and we will be maintaining and building on the ABFA’s work on standards. The ABFA’s Standards Framework incorporates the principles-based code, enforced by an independent complaints process and the Professional Standards Council – and has been brought across.

020 8349 5190

sayhello@alternativebridging.co.uk

@ABC_Bridging

alternativebridging.co.uk

These are exciting times in the commercial finance world. If any readers wish to find out more about the work of UK Finance, they should contact either myself or one of the team.

This advert is for use by professional intermediaries only. Alternative Bridging Corporation Limited is registered in England at First Floor, Healthaid House, 1 Marlborough Hill, Harrow, Middlesex HA1 1UD.

Ask | the expert Your questions answered by the most knowledgeable industry insiders

Calling all Property Professionals… we can do it for you!

Representing the finance and banking industry Jeff Longhurst, head of commercial, invoice finance and asset-based lending at UK Finance (formerly of the Asset Based Finance Association) on the formation of the new trade association representing the finance and banking industry in the UK

WE PROVIDE FUNDS FOR...

CAPITAL RAISING

DEVELOPMENT FINANCE

REFINANCING EXISTING PORTFOLIOS EXIT AN EXISTING BRIDGE

REFURBISHMENT

Q A

What is UK Finance?

UK Finance is a new trade association launched on 1st July 2017 to represent the finance and banking industry in the UK. It brings together many of the activities undertaken by my former organisation – the Asset Based Finance Association (ABFA) – with those of the British Bankers’ Association, the Council of Mortgage Lenders, Financial Fraud Action UK, Payments UK and the UK Cards Association.

UK Finance represents around 300 firms in the UK providing credit, banking, markets and payments-related services.

Q A

What are the association’s objectives?

The objectives of UK Finance are bold: to help our members and stakeholders build customer trust, facilitate appropriate industry-wide collaboration and work constructively with policy makers and regulators in the UK, EU and at a global level on financial services regulation, at all times seeking to ensure that the UK retains its position as a global leader in financial services.

32 | NACFB Magazine

The expectations of consumers of financial services are fast evolving. This is the case whether they are individuals or families, sole traders, SMEs or larger businesses.

The boundaries between different financial services have become blurred and one of the industry’s key challenges is to ensure that the products and services available reflect and respond to the needs of all customers.

Q

Is there a risk that more alternative voices will get drowned out by the big banks working with UK Finance?

A

It is the diversity within the UK Finance membership that’s one of the organisation’s real strengths. The governance of the whole organisation has been designed to ensure that the voices of the full range of products and institutions are not only protected, but enhanced. Where the organisation can speak with one voice, it will do so – and will do so loudly and clearly – but UK Finance is also very comfortable with a plurality of views and will put them forward based on evidence provided.

The unique perspective and voice of the industry I come from – invoice finance and asset-based lending – will be represented within UK Finance by a

dedicated product and service board and the ABFA’s membership has come across into this. The ABFA’s work across education and training, policy development and with key stakeholders, such as the NACFB, continues in UK Finance.

PURCHASE

AUCTION FINANCE

Q

In later years, the ABFA developed a big focus on standards. What is happening with the ABFA’s Standards Framework?

A

Promoting and enhancing standards and best practice will be a key focus for UK Finance and we will be maintaining and building on the ABFA’s work on standards. The ABFA’s Standards Framework incorporates the principles-based code, enforced by an independent complaints process and the Professional Standards Council – and has been brought across.

020 8349 5190

sayhello@alternativebridging.co.uk

@ABC_Bridging

alternativebridging.co.uk

These are exciting times in the commercial finance world. If any readers wish to find out more about the work of UK Finance, they should contact either myself or one of the team.

This advert is for use by professional intermediaries only. Alternative Bridging Corporation Limited is registered in England at First Floor, Healthaid House, 1 Marlborough Hill, Harrow, Middlesex HA1 1UD.

Special | features

SPECIAL FEATURES

An up-to-date insight into the industry

Is age an issue?

Increasing life expectancy has had a huge impact on both public policy and social attitudes towards retirement over the past few decades – but are lenders and brokers keeping up?

Matt Andrews Managing director of mortgages Masthaven

A

t Masthaven, we’re on a mission to challenge the mortgage market to modernise. We’re keen to encourage brokers to see the market with fresh eyes, and as part of this initiative we recently commissioned research into the current lending landscape to identify where the gaps in service and consumer confidence really are. The insights into the experiences of older borrowers that the resulting report provides make for interesting reading.

Mind the age gap One of the most disappointing findings from our research report was the difficulties older borrowers are facing when trying to secure a mortgage. While there is no legal maximum age for mortgage applications, we found that 61% of people aged 55 or over believed it would be hard for them to get a mortgage.

The trouble with this statistic is that Britain is home to an ageing population. In fact, UK life expectancy is growing at a rate of five hours per day. According to the Resolution Foundation think-tank, this year the UK’s non-working population will grow faster than its working population for the first time in over 30 years, meaning that brokers and

lenders could be excluding an ever-growing segment of the market from accessing mortgage products. While we must be careful to avoid creating an overly indebted older generation, clearly these gaps in both customer confidence and mortgage accessibility need to be addressed.

Is age just a number?

The majority of people feel that age should be irrelevant to someone’s suitability for a mortgage – 74% of respondents in our survey said that decisions should be based on affordability, not age. Perhaps unsurprisingly, this figure rises to 79% among those aged 55 or over, who are most likely to feel the adverse effects of any agerelated bias.

In order to see significant improvement in the provision of mortgages for this segment, the way retirement income is assessed has to change

NACFB Magazine | 35

Special | features

SPECIAL FEATURES

An up-to-date insight into the industry

Is age an issue?

Increasing life expectancy has had a huge impact on both public policy and social attitudes towards retirement over the past few decades – but are lenders and brokers keeping up?

Matt Andrews Managing director of mortgages Masthaven

A

t Masthaven, we’re on a mission to challenge the mortgage market to modernise. We’re keen to encourage brokers to see the market with fresh eyes, and as part of this initiative we recently commissioned research into the current lending landscape to identify where the gaps in service and consumer confidence really are. The insights into the experiences of older borrowers that the resulting report provides make for interesting reading.

Mind the age gap One of the most disappointing findings from our research report was the difficulties older borrowers are facing when trying to secure a mortgage. While there is no legal maximum age for mortgage applications, we found that 61% of people aged 55 or over believed it would be hard for them to get a mortgage.

The trouble with this statistic is that Britain is home to an ageing population. In fact, UK life expectancy is growing at a rate of five hours per day. According to the Resolution Foundation think-tank, this year the UK’s non-working population will grow faster than its working population for the first time in over 30 years, meaning that brokers and

lenders could be excluding an ever-growing segment of the market from accessing mortgage products. While we must be careful to avoid creating an overly indebted older generation, clearly these gaps in both customer confidence and mortgage accessibility need to be addressed.

Is age just a number?

The majority of people feel that age should be irrelevant to someone’s suitability for a mortgage – 74% of respondents in our survey said that decisions should be based on affordability, not age. Perhaps unsurprisingly, this figure rises to 79% among those aged 55 or over, who are most likely to feel the adverse effects of any agerelated bias.

In order to see significant improvement in the provision of mortgages for this segment, the way retirement income is assessed has to change

NACFB Magazine | 35

SPECIAL FEATURES

For brokers, it’s also worth thinking about what more specialised products may be available to older customers and exploring all avenues to offer a wider choice of options

Why, then, are brokers and lenders still so cautious with clients approaching retirement? Customers in this segment often have as much reason to seek out a mortgage as younger people. For example: they may want to finance adapting their existing property to cater to their changing needs need to release equity, either to finance care costs or often to help younger generations of their family get on the mortgage ladder.

New tricks In order to see significant improvement in the provision of mortgages for this segment, the way retirement income is assessed has to change. Rather than

automatically rejecting any applicant aged 55 or over, or only taking monthly salary (or lack thereof) into account, brokers and lenders should consider a more holistic and personalised approach towards assessing retirement income and affordability.

While some lenders have been making improvements in their offering to older customers, many still impose upper age limits on mortgage lending, usually for customers aged 65-80.

As we do at Masthaven, lenders should focus on potential customers’ ability to pay, rather than just their age or employment status. As part of this approach, we accept applications from eligible customers well into their retirement, with a maximum age at the end of the loan term of 85.

For brokers, it’s also worth thinking about what more specialised products may be available to older customers and exploring all avenues to offer a wider choice of options.

A mortgage that doesn’t take the biscuit

It’s clear that more needs to be done to ensure that a large proportion of the population aren’t left out in the cold when it comes to securing mortgages. The first step in achieving this is for products and application processes to catch up to the way we live now, embracing the rapidly changing demographics of the UK. Brokers are key to restoring customer faith in the mortgage market, as they can both support older customers in making applications, and increase pressure on lenders to cater to the very people who currently feel underserved.

A more individual approach to lending

Age distribution of the UK population, 1976 to 2046 (projected) Year

0 to 15 years (%)

16 to 64 years (%)

Aged 65 and over (%)

UK population

1976

24.5

61.2

14.2

56,216,121

1986

20.5

64.1

15.4

56,683,835

1996

20.7

63.5

15.9

58,164,374

2006

19.2

64.9

15.9

60,827,067

2016

18.9

63.1

18.0

65,648,054

2026

18.8

60.7

20.5

69,843,515

2036

18.0

58.2

23.9

73,360,907

2046

17.7

57.7

24.7

76,342,235 Source: Office for National Statistics

Wouldn’t the world be a boring place if everyone was the same? Unfortunately, to get a mortgage, other bank lenders expect your clients to fit a standard list of specifications. So we’ve created a more flexible decision process for people who stand out from the pack.

The property used as security for the loan may be repossessed if repayments are not kept up on a mortgage or other loan secured against it.

For intermediary use only

masthaven.co.uk/mortgages Masthaven Bank Limited is a company registered in England & Wales with registration number 09660012 and whose registered office is at: 11 Soho Street, London W1D 3AD. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Firm reference number 719354).

36 | NACFB Magazine

The “Masthaven” name and logos and all other brands, names, logos, marks and slogans on this document are the trademarks or service marks of us or our licensors.

SPECIAL FEATURES

For brokers, it’s also worth thinking about what more specialised products may be available to older customers and exploring all avenues to offer a wider choice of options

Why, then, are brokers and lenders still so cautious with clients approaching retirement? Customers in this segment often have as much reason to seek out a mortgage as younger people. For example: they may want to finance adapting their existing property to cater to their changing needs need to release equity, either to finance care costs or often to help younger generations of their family get on the mortgage ladder.

New tricks In order to see significant improvement in the provision of mortgages for this segment, the way retirement income is assessed has to change. Rather than

automatically rejecting any applicant aged 55 or over, or only taking monthly salary (or lack thereof) into account, brokers and lenders should consider a more holistic and personalised approach towards assessing retirement income and affordability.

While some lenders have been making improvements in their offering to older customers, many still impose upper age limits on mortgage lending, usually for customers aged 65-80.

As we do at Masthaven, lenders should focus on potential customers’ ability to pay, rather than just their age or employment status. As part of this approach, we accept applications from eligible customers well into their retirement, with a maximum age at the end of the loan term of 85.

For brokers, it’s also worth thinking about what more specialised products may be available to older customers and exploring all avenues to offer a wider choice of options.

A mortgage that doesn’t take the biscuit

It’s clear that more needs to be done to ensure that a large proportion of the population aren’t left out in the cold when it comes to securing mortgages. The first step in achieving this is for products and application processes to catch up to the way we live now, embracing the rapidly changing demographics of the UK. Brokers are key to restoring customer faith in the mortgage market, as they can both support older customers in making applications, and increase pressure on lenders to cater to the very people who currently feel underserved.

A more individual approach to lending

Age distribution of the UK population, 1976 to 2046 (projected) Year

0 to 15 years (%)

16 to 64 years (%)

Aged 65 and over (%)

UK population

1976

24.5

61.2

14.2

56,216,121

1986

20.5

64.1

15.4

56,683,835

1996

20.7

63.5

15.9

58,164,374

2006

19.2

64.9

15.9

60,827,067

2016

18.9

63.1

18.0

65,648,054

2026

18.8

60.7

20.5

69,843,515

2036

18.0

58.2

23.9

73,360,907

2046

17.7

57.7

24.7

76,342,235 Source: Office for National Statistics

Wouldn’t the world be a boring place if everyone was the same? Unfortunately, to get a mortgage, other bank lenders expect your clients to fit a standard list of specifications. So we’ve created a more flexible decision process for people who stand out from the pack.

The property used as security for the loan may be repossessed if repayments are not kept up on a mortgage or other loan secured against it.

For intermediary use only

masthaven.co.uk/mortgages Masthaven Bank Limited is a company registered in England & Wales with registration number 09660012 and whose registered office is at: 11 Soho Street, London W1D 3AD. Authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Firm reference number 719354).

36 | NACFB Magazine

The “Masthaven” name and logos and all other brands, names, logos, marks and slogans on this document are the trademarks or service marks of us or our licensors.

SPECIAL FEATURES

MFS NEED FLEXIBLE BESPOKE BRIDGING?

Trends in offshore lending Paresh Raja CEO Market Financial Solutions

A

t Market Financial Solutions (MFS), we are always looking at innovative ways of lending to our clients, one of which is offshore lending.

Over the last quarter, we have seen a significant increase in this specialist sector, and we believe it’s important for brokers to be clear on the basic characteristics of this offering in case they come face to face with borrowers from outside the UK. Some brokers or their clients may not be aware of offshore lending and that it’s a potential and viable solution we offer. Offshore lending is a type of borrowing where the finance is secured against a property within the UK, owned by a non-UK resident or a company that is incorporated outside the UK’s jurisdiction – for example, a company registered in the British Virgin Islands.

Another big increase we have seen over the last 12 months is the number of clients/ investors looking to acquire UK properties for investment purposes. A large number of overseas clients struggle to obtain a buy-to-let mortgage as they fail to meet UK lenders’ criteria. In addition, many of these lenders shy away from lending to expats or non-British borrowers. Based outside the UK, potential borrowers are often unable to satisfy KYC checks or produce information required to complete the process.

However, once initial difficulties of obtaining a loan are overcome, and after letting out their buy-to-let properties for six months, offshore clients will find it much easier to acquire a long-term mortgage as they can provide evidence of rental income being generated, to link with the assured shorthold tenancy agreement.

Case study As an example of how offshore lending works in effect, MFS has recently completed on a transaction for an offshore company looking to acquire a residential investment property in the UK, valued at over £1m. Having acquired significant experience, we know now that lending to an offshore company is not as complex as one may think. In a scenario where the company is registered overseas, we simply require: legal opinion from a lawyer registered in the same location as where the company is registered security charge to be placed at the company house a personal guarantee from the ultimate beneficiary owner of the company.

Having obtained the documents and securities, we were able to raise up to 70% LTV and completed the transaction well within the client’s anticipated completion time.

S TA N D G 0 4

|

O LY M P I A C E N T R A L

9:30AM – 4:30PM

|

8TH NOVEMBER

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

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

Associate Lender

Offshore lending is also designed to assist clients who reside overseas, but are looking to invest into the UK residential or commercial market. In the current economic climate, this is a product we would like to drive and promote so that your potential clients aren’t discouraged from their investment ambitions.

Recently we have observed a number of emerging trends with clients looking at offshore lending. First, we have noticed that a large number of these types of clients are mainly companies registered outside the UK and looking to raise capital on an existing UK property. As not all mainstream loan providers are prepared to lend to offshore companies, or companies registered outside the country, it can be difficult to release equity in order to grow their buy-to-let portfolio – especially without knowing who to turn to.

COME AND MEET THE MFS TEAM AT THE 2017 FINANCE PROFESSIONAL SHOW

Association of Bridging Professionals

38 | NACFB Magazine

SPECIAL FEATURES

MFS NEED FLEXIBLE BESPOKE BRIDGING?

Trends in offshore lending Paresh Raja CEO Market Financial Solutions

A

t Market Financial Solutions (MFS), we are always looking at innovative ways of lending to our clients, one of which is offshore lending.

Over the last quarter, we have seen a significant increase in this specialist sector, and we believe it’s important for brokers to be clear on the basic characteristics of this offering in case they come face to face with borrowers from outside the UK. Some brokers or their clients may not be aware of offshore lending and that it’s a potential and viable solution we offer. Offshore lending is a type of borrowing where the finance is secured against a property within the UK, owned by a non-UK resident or a company that is incorporated outside the UK’s jurisdiction – for example, a company registered in the British Virgin Islands.

Another big increase we have seen over the last 12 months is the number of clients/ investors looking to acquire UK properties for investment purposes. A large number of overseas clients struggle to obtain a buy-to-let mortgage as they fail to meet UK lenders’ criteria. In addition, many of these lenders shy away from lending to expats or non-British borrowers. Based outside the UK, potential borrowers are often unable to satisfy KYC checks or produce information required to complete the process.

However, once initial difficulties of obtaining a loan are overcome, and after letting out their buy-to-let properties for six months, offshore clients will find it much easier to acquire a long-term mortgage as they can provide evidence of rental income being generated, to link with the assured shorthold tenancy agreement.

Case study As an example of how offshore lending works in effect, MFS has recently completed on a transaction for an offshore company looking to acquire a residential investment property in the UK, valued at over £1m. Having acquired significant experience, we know now that lending to an offshore company is not as complex as one may think. In a scenario where the company is registered overseas, we simply require: legal opinion from a lawyer registered in the same location as where the company is registered security charge to be placed at the company house a personal guarantee from the ultimate beneficiary owner of the company.

Having obtained the documents and securities, we were able to raise up to 70% LTV and completed the transaction well within the client’s anticipated completion time.

S TA N D G 0 4

|

O LY M P I A C E N T R A L

9:30AM – 4:30PM

|

8TH NOVEMBER

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

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

Associate Lender

Offshore lending is also designed to assist clients who reside overseas, but are looking to invest into the UK residential or commercial market. In the current economic climate, this is a product we would like to drive and promote so that your potential clients aren’t discouraged from their investment ambitions.

Recently we have observed a number of emerging trends with clients looking at offshore lending. First, we have noticed that a large number of these types of clients are mainly companies registered outside the UK and looking to raise capital on an existing UK property. As not all mainstream loan providers are prepared to lend to offshore companies, or companies registered outside the country, it can be difficult to release equity in order to grow their buy-to-let portfolio – especially without knowing who to turn to.

COME AND MEET THE MFS TEAM AT THE 2017 FINANCE PROFESSIONAL SHOW

Association of Bridging Professionals

38 | NACFB Magazine

SPECIAL FEATURES

Plenty of providers can compete with banks on rates or flexibility and comfortably outdo them when it comes to speed

The world outside your comfort zone Richard Ward Business development manager Fleximize

I

f you asked three business owners for a definition of alternative finance, there’s a good chance their answers would be different. For some, it’s is a catch-all term for any form of finance that doesn’t involve one of the major high street banks.

This may include fixed-term loans from online, non-traditional lenders, and overdrafts from challenger – or mobile-only – banks. Others like to apply the phrase to new types of funding that have emerged since the financial crisis of 2008, primarily P2P lending, crowdfunding or invoice finance.

However, there are still many who might struggle to define alternative finance, either because they’re confused by its meaning or, more tellingly, because they simply aren’t aware of its existence. Meanwhile, 69% of SMEs surveyed by the British Business Bank (BBB) in 2016 said they contacted just one provider the last time they sought finance, compared with 61% in 2015. According to the BBB, this rise

40 | NACFB Magazine

is partly driven by an increase in success rates for businesses that approached just one lender, thus negating their need to shop around for alternative providers.

Yet with so many funding options available to SMEs in today’s market, all tailored to different industries and purposes, businesses have a lot to gain from looking beyond their ‘go to’ lender. There are plenty of providers that can compete with banks on rates or flexibility – offering perks such as repayment holidays, top-ups and penalty-free early repayments – and comfortably outdo them when it comes to speed. Take, as an example, Fleximize’s amortising loans: clients only pay for the amount of days they had a loan if they decide to repay early. Combined with our ability to fund a business within 48 hours, we certainly see ourselves as a compelling and attractive alternative to banks.

Of course, any broker worth their salt will already know what an alternative provider can offer their clients compared to a traditional lender. That’s exactly why we see our brokers as one of our most important marketing channels, and are always looking at ways to both harness and grow our network. Its importance becomes clearer when considering further BBB findings

that show awareness of specific providers is growing at a much slower rate than awareness of different types of finance.

Indeed, such is the knowledge and experience brokers already have of the space that alternative finance is becoming less of an ‘alternative’, and more a mainstream selection of specialist providers.

This is reflective of the ever-changing needs of SMEs, and the subsequent emergence of lenders that can cater to specific requirements and industry niches.

Whether it’s cash flow and growth loans, a ‘pay-as-you-go’ solution like invoice finance, bridging loans for property, or something more obscure like aviation finance, any good broker will have a spectrum of different lenders on their panel to ensure all of their clients’ needs are catered for.

Gone are the days when a standard fixedterm bank loan can solve all of a business’s problems – although there are still SMEs out there that believe it’s their only option.

Government initiatives such as the Bank Referral Scheme and the Enterprise Finance Guarantee have gone some way to improve access to alternative finance, while the recently-formed Association of Alternative Business Finance is a brilliant example of how collective action can help drive greater awareness among SMEs. Through continued collaboration, and by putting the needs of businesses first, lenders and brokers can take alternative finance from the unknown to the norm.

FLEXIBLE SHORT-TERM FINANCE SOLUTIONS Loans from £30,000 to £1,000,000 Rates from as little as 1% pcm* 1st, 2nd and 3rd Charge Bridging Loans Terms 1 - 24 months Average turnaround 10 DAYS

kuflink.co.uk | 01474 33 44 88 *Subject to underwriting criteria Kuflink Bridging Ltd is authorised and regulated by the Financial Conduct Authority. (Ref No. 723495) Registered office: 12 Helmet Row, London EC1V 3QJ. Company Registration (No. 07889226) This advert is intended for intermediary use only Your property may be repossessed if you do not keep up with repayments

Business Product Innovation of the Year

SPECIAL FEATURES

Plenty of providers can compete with banks on rates or flexibility and comfortably outdo them when it comes to speed

The world outside your comfort zone Richard Ward Business development manager Fleximize

I

f you asked three business owners for a definition of alternative finance, there’s a good chance their answers would be different. For some, it’s is a catch-all term for any form of finance that doesn’t involve one of the major high street banks.

This may include fixed-term loans from online, non-traditional lenders, and overdrafts from challenger – or mobile-only – banks. Others like to apply the phrase to new types of funding that have emerged since the financial crisis of 2008, primarily P2P lending, crowdfunding or invoice finance.

However, there are still many who might struggle to define alternative finance, either because they’re confused by its meaning or, more tellingly, because they simply aren’t aware of its existence. Meanwhile, 69% of SMEs surveyed by the British Business Bank (BBB) in 2016 said they contacted just one provider the last time they sought finance, compared with 61% in 2015. According to the BBB, this rise

40 | NACFB Magazine

is partly driven by an increase in success rates for businesses that approached just one lender, thus negating their need to shop around for alternative providers.

Yet with so many funding options available to SMEs in today’s market, all tailored to different industries and purposes, businesses have a lot to gain from looking beyond their ‘go to’ lender. There are plenty of providers that can compete with banks on rates or flexibility – offering perks such as repayment holidays, top-ups and penalty-free early repayments – and comfortably outdo them when it comes to speed. Take, as an example, Fleximize’s amortising loans: clients only pay for the amount of days they had a loan if they decide to repay early. Combined with our ability to fund a business within 48 hours, we certainly see ourselves as a compelling and attractive alternative to banks.

Of course, any broker worth their salt will already know what an alternative provider can offer their clients compared to a traditional lender. That’s exactly why we see our brokers as one of our most important marketing channels, and are always looking at ways to both harness and grow our network. Its importance becomes clearer when considering further BBB findings

that show awareness of specific providers is growing at a much slower rate than awareness of different types of finance.

Indeed, such is the knowledge and experience brokers already have of the space that alternative finance is becoming less of an ‘alternative’, and more a mainstream selection of specialist providers.

This is reflective of the ever-changing needs of SMEs, and the subsequent emergence of lenders that can cater to specific requirements and industry niches.

Whether it’s cash flow and growth loans, a ‘pay-as-you-go’ solution like invoice finance, bridging loans for property, or something more obscure like aviation finance, any good broker will have a spectrum of different lenders on their panel to ensure all of their clients’ needs are catered for.

Gone are the days when a standard fixedterm bank loan can solve all of a business’s problems – although there are still SMEs out there that believe it’s their only option.

Government initiatives such as the Bank Referral Scheme and the Enterprise Finance Guarantee have gone some way to improve access to alternative finance, while the recently-formed Association of Alternative Business Finance is a brilliant example of how collective action can help drive greater awareness among SMEs. Through continued collaboration, and by putting the needs of businesses first, lenders and brokers can take alternative finance from the unknown to the norm.

FLEXIBLE SHORT-TERM FINANCE SOLUTIONS Loans from £30,000 to £1,000,000 Rates from as little as 1% pcm* 1st, 2nd and 3rd Charge Bridging Loans Terms 1 - 24 months Average turnaround 10 DAYS

kuflink.co.uk | 01474 33 44 88 *Subject to underwriting criteria Kuflink Bridging Ltd is authorised and regulated by the Financial Conduct Authority. (Ref No. 723495) Registered office: 12 Helmet Row, London EC1V 3QJ. Company Registration (No. 07889226) This advert is intended for intermediary use only Your property may be repossessed if you do not keep up with repayments

Business Product Innovation of the Year

Compliance | update The latest from our in-house compliance team

GDPR: what you

James Hinch Compliance consultant NACFB

The General Data Protection Regulation (GDPR) seems to have dominated the headlines of late in the regulatory world and as this is fast approaching, it’s important to set out your strategy for the next moves.

42 | NACFB Magazine

T

hese are the steps which the Information Commissioner’s Office (ICO) released, which I will provide an overview for below. The GDPR will replace the current Data Protection Act 1998 from 25th May 2018. The government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the GDPR. It’s vital to plan the implementation of GDPR into your business now, in order to embed the changes by the deadline.

with the areas below will require businesses to review their approach to how they manage data protection.

An example may be a commercial finance broker’s business contracts or arrangements when sharing customer data with other businesses, partners or organisations.

Now is the best time to plan which areas of the GDPR will have greatest impact on your business and focus on compliance with these to start with.

For example, you will need to implement a new process in order to meet new transparency and individuals’ rights provisions.

In a larger business, this could have significant financial and IT repercussions.

Awareness All decision makers or key people in your business need to be made aware that the law is changing to the new GDPR. IIt is advisable for businesses to asses the changes required to their business as soon as possible in order to ensure a smooth transition to the new regulations.

The GDPR places the importance on the documentation that data controllers must keep, demonstrating their accountability. Compliance

GDPR is definitely one for your risk registers, if it’s not already on there.

need to know

Information you hold The GDPR requires you to maintain records of your processing activities.

You need to be able to demonstrate what personal data you hold, where it came from and who you share it with.

Individual rights The GDPR includes the following rights for individuals: the right to be informed the right of access

Communication privacy information Currently, you must give people certain information, such as who you are and how you intend to use customer information. This is usually done through a privacy notice.

Under the GDPR there are some additional elements. For example, you will need to explain your lawful basis for processing the data, how long you keep the data, and that individuals have a right to complain to the ICO if they think there is a problem with the way you are handling their data.

You should review your current privacy notices and plan for any necessary changes in time, ready for May 2018.

the right to rectification

Data portability The right to data portability is new.

You will need to provide the personal data in a structured, commonly used and machine-readable form such as CSV, and provide the information free of charge. It applies: to personal data an individual has provided to a controller

the right to erasure This is a good time to review procedures and to work out how you would respond if a customer asked to have their personal data deleted.

where the processing is based on the individual’s consent or for the performance of a contract when processing is carried out by automated means.

the right to restrict processing the right to data portability the right to object the right not to be subject to automated decision making, including profiling.

Subject access requests (SAR) New rules around SARs mean that: In most cases, you will not be able to charge for a request You will have a month to comply, rather than the current 40 days

NACFB Magazine | 43

Compliance | update The latest from our in-house compliance team

GDPR: what you

James Hinch Compliance consultant NACFB

The General Data Protection Regulation (GDPR) seems to have dominated the headlines of late in the regulatory world and as this is fast approaching, it’s important to set out your strategy for the next moves.

42 | NACFB Magazine

T

hese are the steps which the Information Commissioner’s Office (ICO) released, which I will provide an overview for below. The GDPR will replace the current Data Protection Act 1998 from 25th May 2018. The government has confirmed that the UK’s decision to leave the EU will not affect the commencement of the GDPR. It’s vital to plan the implementation of GDPR into your business now, in order to embed the changes by the deadline.

with the areas below will require businesses to review their approach to how they manage data protection.

An example may be a commercial finance broker’s business contracts or arrangements when sharing customer data with other businesses, partners or organisations.

Now is the best time to plan which areas of the GDPR will have greatest impact on your business and focus on compliance with these to start with.

For example, you will need to implement a new process in order to meet new transparency and individuals’ rights provisions.

In a larger business, this could have significant financial and IT repercussions.

Awareness All decision makers or key people in your business need to be made aware that the law is changing to the new GDPR. IIt is advisable for businesses to asses the changes required to their business as soon as possible in order to ensure a smooth transition to the new regulations.

The GDPR places the importance on the documentation that data controllers must keep, demonstrating their accountability. Compliance

GDPR is definitely one for your risk registers, if it’s not already on there.

need to know

Information you hold The GDPR requires you to maintain records of your processing activities.

You need to be able to demonstrate what personal data you hold, where it came from and who you share it with.

Individual rights The GDPR includes the following rights for individuals: the right to be informed the right of access

Communication privacy information Currently, you must give people certain information, such as who you are and how you intend to use customer information. This is usually done through a privacy notice.

Under the GDPR there are some additional elements. For example, you will need to explain your lawful basis for processing the data, how long you keep the data, and that individuals have a right to complain to the ICO if they think there is a problem with the way you are handling their data.

You should review your current privacy notices and plan for any necessary changes in time, ready for May 2018.

the right to rectification

Data portability The right to data portability is new.

You will need to provide the personal data in a structured, commonly used and machine-readable form such as CSV, and provide the information free of charge. It applies: to personal data an individual has provided to a controller

the right to erasure This is a good time to review procedures and to work out how you would respond if a customer asked to have their personal data deleted.

where the processing is based on the individual’s consent or for the performance of a contract when processing is carried out by automated means.

the right to restrict processing the right to data portability the right to object the right not to be subject to automated decision making, including profiling.

Subject access requests (SAR) New rules around SARs mean that: In most cases, you will not be able to charge for a request You will have a month to comply, rather than the current 40 days

NACFB Magazine | 43

COMPLIANCE

Now is the best time to plan which areas of the GDPR will have greatest impact to your business

You can refuse or charge for requests that are manifestly unfounded or excessive If you refuse a request, you must tell the individual why and that they have the right to complain to the supervisory authority and to a judicial remedy. You must do this without undue delay and, at the latest, within one month.

Processing personal data You should identify the lawful basis for your processing activity in the GDPR, document it and update your privacy notice to explain it. You will also have to explain your lawful basis for processing personal data in your privacy notice and when you answer a subject access request.

Consent You should review how you seek, record and manage consent and whether you need to make any changes. Refresh existing consents now if they don’t meet the GDPR standard. Consent must be freely given, specific, informed and unambiguous. There must be a positive opt-in – consent cannot be inferred from silence, pre-ticked boxes or inactivity. It must also be separate from other terms and conditions, and you will need to have simple ways for people to withdraw consent.

data breach to the ICO and, in some cases, to individuals. You should put procedures in place to effectively detect, report and investigate a personal data breach. Failure to report a breach when required to do so could result in a fine, as well as a fine for the breach itself.

Data protection by design Privacy by design is an express legal requirement; it also makes data protection impact assessments (DPIA) mandatory in certain circumstances.

A DPIA is required in conditions where data processing is likely to result in high risk to individuals, for example: where a new technology is being deployed; where a profiling operation is likely to significantly affect individuals where there is processing on a large scale of special categories of data, such as health records or information about criminal convictions.

Data protection officers You may be required to appoint a data protection officer to take ownership for your data protection compliance. This will only apply if your business is: a public authority

Data breaches You should make sure you have the right procedures in place to detect, report and investigate a personal data breach.

The GDPR introduces a duty on all businesses to report certain types of

an organisation that carries out the regular and systematic monitoring of individuals on a large scale an organisation that carries out the large-scale processing of special categories of data.

SPEED MEETS EXPERIENCE 020 7655 3388

FAST PROPERTY FINANCE At Commercial Acceptances speed alone is not enough.

Speak straight to decision makers: a quick & personal service. No arrangement fees, no extension fees and no end fees.

Interest charged from only 0.75% per calendar month.

Your property may be repossessed if you do not keep up on your mortgage repayments or any other debt secured on it. A rate from 0.75% will be chargeable on the amount borrowed every calendar month. However rates are subject to change and will increase or decrease in line with movements in 3m LIBOR (The London Inter-Bank Offered Rate For Three Month Sterling Deposits). Rates will be adjusted on each calendar month anniversary of the facility. The overall cost for comparison is 10.6% APR.

44 | NACFB Magazine

COMPLIANCE

Now is the best time to plan which areas of the GDPR will have greatest impact to your business

You can refuse or charge for requests that are manifestly unfounded or excessive If you refuse a request, you must tell the individual why and that they have the right to complain to the supervisory authority and to a judicial remedy. You must do this without undue delay and, at the latest, within one month.

Processing personal data You should identify the lawful basis for your processing activity in the GDPR, document it and update your privacy notice to explain it. You will also have to explain your lawful basis for processing personal data in your privacy notice and when you answer a subject access request.

Consent You should review how you seek, record and manage consent and whether you need to make any changes. Refresh existing consents now if they don’t meet the GDPR standard. Consent must be freely given, specific, informed and unambiguous. There must be a positive opt-in – consent cannot be inferred from silence, pre-ticked boxes or inactivity. It must also be separate from other terms and conditions, and you will need to have simple ways for people to withdraw consent.

data breach to the ICO and, in some cases, to individuals. You should put procedures in place to effectively detect, report and investigate a personal data breach. Failure to report a breach when required to do so could result in a fine, as well as a fine for the breach itself.

Data protection by design Privacy by design is an express legal requirement; it also makes data protection impact assessments (DPIA) mandatory in certain circumstances.

A DPIA is required in conditions where data processing is likely to result in high risk to individuals, for example: where a new technology is being deployed; where a profiling operation is likely to significantly affect individuals where there is processing on a large scale of special categories of data, such as health records or information about criminal convictions.

Data protection officers You may be required to appoint a data protection officer to take ownership for your data protection compliance. This will only apply if your business is: a public authority

Data breaches You should make sure you have the right procedures in place to detect, report and investigate a personal data breach.

The GDPR introduces a duty on all businesses to report certain types of

an organisation that carries out the regular and systematic monitoring of individuals on a large scale an organisation that carries out the large-scale processing of special categories of data.

SPEED MEETS EXPERIENCE 020 7655 3388

FAST PROPERTY FINANCE At Commercial Acceptances speed alone is not enough.

Speak straight to decision makers: a quick & personal service. No arrangement fees, no extension fees and no end fees.

Interest charged from only 0.75% per calendar month.

Your property may be repossessed if you do not keep up on your mortgage repayments or any other debt secured on it. A rate from 0.75% will be chargeable on the amount borrowed every calendar month. However rates are subject to change and will increase or decrease in line with movements in 3m LIBOR (The London Inter-Bank Offered Rate For Three Month Sterling Deposits). Rates will be adjusted on each calendar month anniversary of the facility. The overall cost for comparison is 10.6% APR.

44 | NACFB Magazine

Spotlight

Patrons’ day: engaging with NACFB lenders The second NACFB Patrons’ day took place in London on 26th September, following on from our Members’ day a week prior.

R

epresentatives from 50 NACFB lenders joined chief executive Graham Toy, managing director Norman Chambers and members of the NACFB board at a forum designed to outline the Association’s progress and look ahead to future development.

The opening words of chairman Paul Goodman outlined that such days are part of a journey the NACFB is taking in efforts to become “more transparent, inclusive and engaged”. This is a journey that the Association wants to take hand in

46 | NACFB Magazine

hand with Members and Patrons alike, and the ideas and feedback received will help shape, steer and structure positive future changes.

Graham used the forum as a platform to discuss key issues faceto-face, and roadmap a plan for future growth with the support and understanding of the lenders NACFB Member brokers work with.

Patrons collectively recognised the positive changes the NACFB has made in the last 18 months

and looked forward to seeing a continuation on the same trajectory.

As with the Members’ day feedback the week before, Patrons also expressed their desire to have greater clarity of communication from the NACFB and more distinctly tailored messages to each sector.

Engagement was the word on everyone’s lips, and Graham was eager to relay that improving engagement levels across all channels is top of his priority list. This will take consistent effort on the part of the

Association to deliver ongoing value and communicate more clearly the mission statement of the NACFB. The open and frank discourse between the head office team, NACFB board and Patrons offered some lively debate and constructive feedback. When asked what Patrons viewed as a priority for the NACFB, it was clear that compliance matters are very high on the agenda. While Patrons conduct their own due diligence checks with the brokers they engage with, there were further calls for the NACFB to encourage all its Members to be fully compliant ahead of regulatory changes.

Following roundtable discussions, Patrons fed back to the room that there is still demand for more brokers and greater broker education.

Educating brokers more thoroughly on the full spectrum of available lenders and their products, as well as risk appetite awareness is an area where Patrons feel the NACFB could improve. As the commercial finance

sector is changing rapidly while attracting new talent, it was suggested that the benefits of becoming a broker as a career option should also fall within the NACFB’s remit.

“We view the NACFB as an Association built by Members for Members,” offered one Patron, echoing the same sentiments from the broker session of the week before. But there are key areas where the NACFB can improve; namely, in the variety of sponsorship opportunities available, the strategic use of survey data, and enhancing the visibility of the Association across the UK to further decentralise from London.

Vice-chairman Adrian Coles spoke of the Association’s internal governance structure review. Adrian spoke of an ongoing process and the bid to gain a better grasp of what Patrons want to see from the Association in the future, as well as how board restructuring can benefit an NACFB that is growing in both scale and complexity. An area that was met with enthusiasm

was the notion of having greater board diversity – one suggestion put forward by Patrons was to “taper in” specialist board members, creating an opportunity for legal and Patron board representation in the future.

This was only the second Patrons’ day in 2017 but similar opportunities will form part of the NACFB’s events calendar in 2018. How can the NACFB work better to help our Patrons?

Were you unable to attend and feel like offering your own perspective?

Get in touch. The NACFB is not just receptive to feedback on Members’ and Patrons’ days – you can reach us any time by contacting any member of our team via phone or email.

Kieran Jones Communications manager NACFB

NACFB Magazine | 47

Spotlight

Patrons’ day: engaging with NACFB lenders The second NACFB Patrons’ day took place in London on 26th September, following on from our Members’ day a week prior.

R

epresentatives from 50 NACFB lenders joined chief executive Graham Toy, managing director Norman Chambers and members of the NACFB board at a forum designed to outline the Association’s progress and look ahead to future development.

The opening words of chairman Paul Goodman outlined that such days are part of a journey the NACFB is taking in efforts to become “more transparent, inclusive and engaged”. This is a journey that the Association wants to take hand in

46 | NACFB Magazine

hand with Members and Patrons alike, and the ideas and feedback received will help shape, steer and structure positive future changes.

Graham used the forum as a platform to discuss key issues faceto-face, and roadmap a plan for future growth with the support and understanding of the lenders NACFB Member brokers work with.

Patrons collectively recognised the positive changes the NACFB has made in the last 18 months

and looked forward to seeing a continuation on the same trajectory.

As with the Members’ day feedback the week before, Patrons also expressed their desire to have greater clarity of communication from the NACFB and more distinctly tailored messages to each sector.

Engagement was the word on everyone’s lips, and Graham was eager to relay that improving engagement levels across all channels is top of his priority list. This will take consistent effort on the part of the

Association to deliver ongoing value and communicate more clearly the mission statement of the NACFB. The open and frank discourse between the head office team, NACFB board and Patrons offered some lively debate and constructive feedback. When asked what Patrons viewed as a priority for the NACFB, it was clear that compliance matters are very high on the agenda. While Patrons conduct their own due diligence checks with the brokers they engage with, there were further calls for the NACFB to encourage all its Members to be fully compliant ahead of regulatory changes.

Following roundtable discussions, Patrons fed back to the room that there is still demand for more brokers and greater broker education.

Educating brokers more thoroughly on the full spectrum of available lenders and their products, as well as risk appetite awareness is an area where Patrons feel the NACFB could improve. As the commercial finance

sector is changing rapidly while attracting new talent, it was suggested that the benefits of becoming a broker as a career option should also fall within the NACFB’s remit.

“We view the NACFB as an Association built by Members for Members,” offered one Patron, echoing the same sentiments from the broker session of the week before. But there are key areas where the NACFB can improve; namely, in the variety of sponsorship opportunities available, the strategic use of survey data, and enhancing the visibility of the Association across the UK to further decentralise from London.

Vice-chairman Adrian Coles spoke of the Association’s internal governance structure review. Adrian spoke of an ongoing process and the bid to gain a better grasp of what Patrons want to see from the Association in the future, as well as how board restructuring can benefit an NACFB that is growing in both scale and complexity. An area that was met with enthusiasm

was the notion of having greater board diversity – one suggestion put forward by Patrons was to “taper in” specialist board members, creating an opportunity for legal and Patron board representation in the future.

This was only the second Patrons’ day in 2017 but similar opportunities will form part of the NACFB’s events calendar in 2018. How can the NACFB work better to help our Patrons?

Were you unable to attend and feel like offering your own perspective?

Get in touch. The NACFB is not just receptive to feedback on Members’ and Patrons’ days – you can reach us any time by contacting any member of our team via phone or email.

Kieran Jones Communications manager NACFB

NACFB Magazine | 47

Industry | guides

A FS GROU P

Insider tips from the Association’s Patrons and Members

Financing potential Sarah Jackson Underwriting manager Pivot

P

rior to 2008, some notable high street banks often lent against valuations containing an element of hope value, on the assumption that planning permission would be granted.

But when the financial crash happened, land values plummeted, lenders got caught and valuers became inundated with PI claims.

Subsequently, the industry has recognised its inability to measure this risk and most lenders stopped offering this type of product.

In the years following the crash, lenders reacted by simplifying their offering, withdrawing complex and development-related products, leading to a gap in the lending market. With planning requirements constantly changing for both central and local government, this gap has remained and provides an opportunity for specialist lenders who understand the risks.

Clearly, there was a need for preplan finance, which is why Pivot developed this product. Aimed at small, experienced developers, perhaps building three or four residential units or converting a building, we can lend up to £1m at an LTV of 85% of current use or 65% of expected value with planning in place. We do require borrowers to be experienced in gaining planning, or at least have a suitable planning consultant appointed.

Our standard process involves obtaining a planning opinion from our appointed consultants on the client’s proposed scheme. Often this opinion will help the client, as small tweaks or amendments may be suggested to help maximise the potential of the project and the likelihood of planning being granted.

In this case, it would be a condition of our loan that the borrower implements these recommendations and revise the scheme accordingly.

We then maintain close contact with the borrower to ensure they have a successful pre-application meeting, and that application submission and any follow-up items are completed.

We appreciate that bridging finance has traditionally been known as the speedy finance solution; brokers often ask how long it takes to obtain a planning opinion and a valuation off the back of this. Although it might add a few weeks to the timescale, obtaining a planning opinion is vital to understand the transaction risks, which allows us to lend at a higher level. Along with taking a little longer, there is clearly the additional expense of the planning opinion. However, this is offset by the fact that we can advance a larger amount on day one, thereby reducing the borrower’s equity requirement.

We are sometimes approached by brokers requesting this product because the borrowers have yet to obtain planning permission – the stage the borrower is at shouldn’t be confused with the product the borrower requires. Upon investigation, we can frequently use a standard commercial bridge if there are other assets to be used as security or the borrower can demonstrate the ability to service monthly interest. We always endeavour to find the most suitable and costeffective solution for our clients.

ns is proud to Asset Finance Solutio Asset Provider of the sponsor the Leasing & rgy Commercial Year, together with Syne rs of the Commercial Finance, proud sponso Year at the Mortgage Lender of the 2017.

NACFB Industry Awards

CONGRATULATIONS AND GOOD LUCK TO ALL THE FINALISTS.

WE’VE GOT YOU COVERED

STRONGER TOGETHER

visit brokerinabox.finance for more information Asset Finance Solutions (UK) Ltd and Synergy Commercial Finance Limited are an Appointed Representative of AFS Compliance Ltd, which is Authorised and Regulated by the Financial Conduct Authority under number 625035.

48 | NACFB Magazine

Industry | guides

A FS GROU P

Insider tips from the Association’s Patrons and Members

Financing potential Sarah Jackson Underwriting manager Pivot

P

rior to 2008, some notable high street banks often lent against valuations containing an element of hope value, on the assumption that planning permission would be granted.

But when the financial crash happened, land values plummeted, lenders got caught and valuers became inundated with PI claims.

Subsequently, the industry has recognised its inability to measure this risk and most lenders stopped offering this type of product.

In the years following the crash, lenders reacted by simplifying their offering, withdrawing complex and development-related products, leading to a gap in the lending market. With planning requirements constantly changing for both central and local government, this gap has remained and provides an opportunity for specialist lenders who understand the risks.

Clearly, there was a need for preplan finance, which is why Pivot developed this product. Aimed at small, experienced developers, perhaps building three or four residential units or converting a building, we can lend up to £1m at an LTV of 85% of current use or 65% of expected value with planning in place. We do require borrowers to be experienced in gaining planning, or at least have a suitable planning consultant appointed.

Our standard process involves obtaining a planning opinion from our appointed consultants on the client’s proposed scheme. Often this opinion will help the client, as small tweaks or amendments may be suggested to help maximise the potential of the project and the likelihood of planning being granted.

In this case, it would be a condition of our loan that the borrower implements these recommendations and revise the scheme accordingly.

We then maintain close contact with the borrower to ensure they have a successful pre-application meeting, and that application submission and any follow-up items are completed.

We appreciate that bridging finance has traditionally been known as the speedy finance solution; brokers often ask how long it takes to obtain a planning opinion and a valuation off the back of this. Although it might add a few weeks to the timescale, obtaining a planning opinion is vital to understand the transaction risks, which allows us to lend at a higher level. Along with taking a little longer, there is clearly the additional expense of the planning opinion. However, this is offset by the fact that we can advance a larger amount on day one, thereby reducing the borrower’s equity requirement.

We are sometimes approached by brokers requesting this product because the borrowers have yet to obtain planning permission – the stage the borrower is at shouldn’t be confused with the product the borrower requires. Upon investigation, we can frequently use a standard commercial bridge if there are other assets to be used as security or the borrower can demonstrate the ability to service monthly interest. We always endeavour to find the most suitable and costeffective solution for our clients.

ns is proud to Asset Finance Solutio Asset Provider of the sponsor the Leasing & rgy Commercial Year, together with Syne rs of the Commercial Finance, proud sponso Year at the Mortgage Lender of the 2017.

NACFB Industry Awards

CONGRATULATIONS AND GOOD LUCK TO ALL THE FINALISTS.

WE’VE GOT YOU COVERED

STRONGER TOGETHER

visit brokerinabox.finance for more information Asset Finance Solutions (UK) Ltd and Synergy Commercial Finance Limited are an Appointed Representative of AFS Compliance Ltd, which is Authorised and Regulated by the Financial Conduct Authority under number 625035.

48 | NACFB Magazine

GUIDES

Let’s get clear on autobid vs manual Stuart Lunn Founder and CEO LendingCrowd

M

oving away from manual investments on their platforms, the ‘big three’ P2P providers now all provide passive investment products only. Many platforms still offer active investing and some offer both active and passive products.

However, the Funding Circle move earlier in 2017 has caused some consternation among existing active investors and raised questions in the press as to whether P2P has moved away from its roots.

It’s clear that to drive mass market adoption of P2P investing, for example through the new Innovative Finance Isa, it’s necessary to simplify the products and enable greater transparency and comparability, meaning that automated products are the more likely route to market growth. This echoes the dynamics of other asset classes, such as stock market investing, whereby the vast majority of individuals invest passively, using funds.

Another driver, partly in response to increased regulatory interest, is that passive products force greater diversification – the number one risk mitigator for P2P investors.

Other factors include that passive investors are cheaper for platforms to service than active investors, and that passive products are more likely to be adopted by intermediaries, such as IFAs and wealth managers, over the next two to three years.

While the packaging of loans between active and passive is largely an investor issue, there are implications for borrowers and their representatives. For example, the expected growth in investor numbers – as P2P reaches a broader investor

50 | NACFB Magazine

audience – will increase the supply of capital through P2P platforms, further increasing the importance of alternative finance providers.

Further, this capital tends to be sticky, meaning that platforms can build long-term, sustainable businesses with capital that continues to be reinvested and is potentially less flighty than some sources of institutional funding.

So, what are the differences in approach?

Manual/active P2P investing Investing in P2P loans manually provides flexibility to choose loan holdings and how much to lend to each borrower, giving control over the portfolio. Investors can select holdings based on their individual risk tolerance, sector and geographic bias and with some platforms, including LendingCrowd, the ability to set your own interest rates through an auction process.

While investors benefit from this control, they are also responsible for diversifying their portfolio. Spreading funds across as many investments as possible is the best way to reduce risk, but it can be time-consuming to keep on top of a large portfolio. If capital and interest are repaid monthly, uninvested cash builds up quickly, causing a cash drag on returns.

Automated/passive P2P investing With automated investment options, investor funds are automatically lent without having to choose individual investments. This type of account gives investors an almost instant investment portfolio with little to no intervention or selection required, making it a convenient and efficient way to invest larger sums of money in P2P. Most platforms promise to spread funds over a wide range of loans, giving an automatically diversified portfolio with little manual effort. Repayments may also be automatically reinvested, eliminating the risk of having uninvested cash in your account.

For experienced investors, the lack of control offered by automated P2P accounts can be a disadvantage, particularly if there is no option to pre-set certain investment criteria.

So, passive is not for everyone, but it is the more likely route into P2P for the vast majority of investors.

Regardless of how the loan portfolio is packaged, investors need to bear in mind the risks of investing in loans of different types (eg personal, SME, property), the level of diversification offered, restrictions on withdrawals (eg fixed terms) and fees. Also important is choosing a platform that is fully authorised by the FCA.

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.

GUIDES

Let’s get clear on autobid vs manual Stuart Lunn Founder and CEO LendingCrowd

M

oving away from manual investments on their platforms, the ‘big three’ P2P providers now all provide passive investment products only. Many platforms still offer active investing and some offer both active and passive products.

However, the Funding Circle move earlier in 2017 has caused some consternation among existing active investors and raised questions in the press as to whether P2P has moved away from its roots.

It’s clear that to drive mass market adoption of P2P investing, for example through the new Innovative Finance Isa, it’s necessary to simplify the products and enable greater transparency and comparability, meaning that automated products are the more likely route to market growth. This echoes the dynamics of other asset classes, such as stock market investing, whereby the vast majority of individuals invest passively, using funds.

Another driver, partly in response to increased regulatory interest, is that passive products force greater diversification – the number one risk mitigator for P2P investors.

Other factors include that passive investors are cheaper for platforms to service than active investors, and that passive products are more likely to be adopted by intermediaries, such as IFAs and wealth managers, over the next two to three years.

While the packaging of loans between active and passive is largely an investor issue, there are implications for borrowers and their representatives. For example, the expected growth in investor numbers – as P2P reaches a broader investor

50 | NACFB Magazine

audience – will increase the supply of capital through P2P platforms, further increasing the importance of alternative finance providers.

Further, this capital tends to be sticky, meaning that platforms can build long-term, sustainable businesses with capital that continues to be reinvested and is potentially less flighty than some sources of institutional funding.

So, what are the differences in approach?

Manual/active P2P investing Investing in P2P loans manually provides flexibility to choose loan holdings and how much to lend to each borrower, giving control over the portfolio. Investors can select holdings based on their individual risk tolerance, sector and geographic bias and with some platforms, including LendingCrowd, the ability to set your own interest rates through an auction process.

While investors benefit from this control, they are also responsible for diversifying their portfolio. Spreading funds across as many investments as possible is the best way to reduce risk, but it can be time-consuming to keep on top of a large portfolio. If capital and interest are repaid monthly, uninvested cash builds up quickly, causing a cash drag on returns.

Automated/passive P2P investing With automated investment options, investor funds are automatically lent without having to choose individual investments. This type of account gives investors an almost instant investment portfolio with little to no intervention or selection required, making it a convenient and efficient way to invest larger sums of money in P2P. Most platforms promise to spread funds over a wide range of loans, giving an automatically diversified portfolio with little manual effort. Repayments may also be automatically reinvested, eliminating the risk of having uninvested cash in your account.

For experienced investors, the lack of control offered by automated P2P accounts can be a disadvantage, particularly if there is no option to pre-set certain investment criteria.

So, passive is not for everyone, but it is the more likely route into P2P for the vast majority of investors.

Regardless of how the loan portfolio is packaged, investors need to bear in mind the risks of investing in loans of different types (eg personal, SME, property), the level of diversification offered, restrictions on withdrawals (eg fixed terms) and fees. Also important is choosing a platform that is fully authorised by the FCA.

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.

Opinion | & commentary Thought leadership from our Patrons and Members

Does vehicle finance have an

image problem?

Scott Maybury CEO PCF Bank

The sky is falling. Or, at least, that’s what many commentators covering vehicle finance and the personal contract purchase (PCP) market, in particular, would have us believe.

52 | NACFB Magazine

P

CPs are fairly complex loans which tend to carry 36-month terms, allowing customers to pay a 10% deposit on a new car and then pay monthly rentals, down to a balance which represents what the manufacturer believes the car will be worth at the end of that three-year term. Once the term is complete, borrowers can either pay a balloon payment and buy the car outright, hand the car back to the manufacturer or take out another PCP for a new car.

PCF Bank has provided asset-backed finance in the vehicle and equipment space to both small businesses and consumers for over 20 years. While there may be some scepticism surrounding the provision of PCPs to ‘sub-prime’ borrowers, it is our view that the vehicle finance market on the whole is in good health and much of the commentary is misplaced.

Last year saw record levels of car sales in Britain and America, while Britain also saw second-hand car sales at historic highs. Despite some of the anxiousness surrounding the state of the market,

consumers and small businesses continue to need access to vehicle financing. After all, the PCP product was designed to generate repeat sales.

A fall in residual values across the market is a risk to all finance companies, but the captive, manufacturer-owned finance companies are well placed to manage vehicle sales and supply.

The FCA’s inquiry into the PCP market certainly places extra scrutiny on the industry as a whole, but it is scrutiny we should be willing to accept to ensure that financial products aren’t mis-sold and all those brokers, dealers and lenders engaging with the vehicle finance market are reputable and above board. There may be some sector challenges to be addressed but these aren’t insurmountable.

There may be a squeeze in real wages, but that could not be long-lasting, and interest rates remain low – so there is still a demonstrable appetite for vehicle financing in the UK. Lenders can continue to be successful as long as they manage their loan portfolio risk and pricing.

If there are misconceptions about the industry, then the onus is on those of us who work within it to change that. PCF Bank only deals with brokers and dealers who are FCA-approved, and we are very proud of our long-lasting relationships with those brokers, which are based on mutual trust.

We must continue to carefully manage our risk appetite and balance portfolio growth with quality control. It may be easier to chase increased margins by lending into more high-risk areas of the market or at smaller margins, but any lender that does so should carefully weigh up the potential consequences in more troubled times.

Asset-backed finance can seem complex to those unfamiliar with it, and so lenders must ensure their products are easy for the customer to understand, and for brokers to access. This is equally true when focusing on the customer experience. A consumer having access to a car for work

It is our view that the vehicle finance market on the whole is in good health and much of the commentary is misplaced

or family needs can be essential, and the same is true for business-critical SMEs. Vehicle finance should be viewed as an industry which enables both consumers and businesses, rather than seeks to take advantage of those with lower credit ratings.

Our industry is essential in supporting both everyday Britons and driving SME growth.

Market data shows that demand is still strong and so, despite the fears surrounding PCPs, I retain confidence in the vehicle finance market and its ability to sustain growth.

The responsibility lies with lenders and brokers to ensure that products are recommended responsibly, but as long as our industry focuses on its core tenets of trust and accountability, vehicle finance should continue to play a key role in the British economy.

NACFB Magazine | 53

Opinion | & commentary Thought leadership from our Patrons and Members

Does vehicle finance have an

image problem?

Scott Maybury CEO PCF Bank

The sky is falling. Or, at least, that’s what many commentators covering vehicle finance and the personal contract purchase (PCP) market, in particular, would have us believe.

52 | NACFB Magazine

P

CPs are fairly complex loans which tend to carry 36-month terms, allowing customers to pay a 10% deposit on a new car and then pay monthly rentals, down to a balance which represents what the manufacturer believes the car will be worth at the end of that three-year term. Once the term is complete, borrowers can either pay a balloon payment and buy the car outright, hand the car back to the manufacturer or take out another PCP for a new car.

PCF Bank has provided asset-backed finance in the vehicle and equipment space to both small businesses and consumers for over 20 years. While there may be some scepticism surrounding the provision of PCPs to ‘sub-prime’ borrowers, it is our view that the vehicle finance market on the whole is in good health and much of the commentary is misplaced.

Last year saw record levels of car sales in Britain and America, while Britain also saw second-hand car sales at historic highs. Despite some of the anxiousness surrounding the state of the market,

consumers and small businesses continue to need access to vehicle financing. After all, the PCP product was designed to generate repeat sales.

A fall in residual values across the market is a risk to all finance companies, but the captive, manufacturer-owned finance companies are well placed to manage vehicle sales and supply.

The FCA’s inquiry into the PCP market certainly places extra scrutiny on the industry as a whole, but it is scrutiny we should be willing to accept to ensure that financial products aren’t mis-sold and all those brokers, dealers and lenders engaging with the vehicle finance market are reputable and above board. There may be some sector challenges to be addressed but these aren’t insurmountable.

There may be a squeeze in real wages, but that could not be long-lasting, and interest rates remain low – so there is still a demonstrable appetite for vehicle financing in the UK. Lenders can continue to be successful as long as they manage their loan portfolio risk and pricing.

If there are misconceptions about the industry, then the onus is on those of us who work within it to change that. PCF Bank only deals with brokers and dealers who are FCA-approved, and we are very proud of our long-lasting relationships with those brokers, which are based on mutual trust.

We must continue to carefully manage our risk appetite and balance portfolio growth with quality control. It may be easier to chase increased margins by lending into more high-risk areas of the market or at smaller margins, but any lender that does so should carefully weigh up the potential consequences in more troubled times.

Asset-backed finance can seem complex to those unfamiliar with it, and so lenders must ensure their products are easy for the customer to understand, and for brokers to access. This is equally true when focusing on the customer experience. A consumer having access to a car for work

It is our view that the vehicle finance market on the whole is in good health and much of the commentary is misplaced

or family needs can be essential, and the same is true for business-critical SMEs. Vehicle finance should be viewed as an industry which enables both consumers and businesses, rather than seeks to take advantage of those with lower credit ratings.

Our industry is essential in supporting both everyday Britons and driving SME growth.

Market data shows that demand is still strong and so, despite the fears surrounding PCPs, I retain confidence in the vehicle finance market and its ability to sustain growth.

The responsibility lies with lenders and brokers to ensure that products are recommended responsibly, but as long as our industry focuses on its core tenets of trust and accountability, vehicle finance should continue to play a key role in the British economy.

NACFB Magazine | 53

OPINION & COMMENTARY

Leave no stone unturned for a re-bridge W

Only when these, and perhaps also other questions relevant to the case have been

54 | NACFB Magazine

This is why it is so important to have a funding solution in place and a revolving line of credit can be the ideal solution.

This is simply finance that your clients have approved access to.

They can draw down on these funds when the need arises and normally will only pay interest on the amount they have borrowed.

The advantage of a flexible line of credit is that unlike some other forms of business finance it doesn’t come with a set repayment plan that might not fit with the way cash flows in and out of a business.

Most companies suffer growing pains.

These can come in the form of finding sufficient funds to pay for stock and work in progress, the costs of marketing a new product or service and occasionally a

But there is also a need to remain vigilant when assessing new cases – after all, each case needs looking at on its own merits, and this is also very true of re-bridging applications.

Then we move on to looking at the property and what the customer is planning to do with it. For example, is the type of property, and the sale or rental price, in line with demand in the local area, so that a buyer or tenant can be found quickly?

debtor who is a slow or non-payer.

Any of these can stifle growth or cause severe cashflow issues.

Everything can look fine with a business plan. The order book is full, there are reliable suppliers and excellent opportunities for growth. However, the day to day reality is that future profits are largely irrelevant as there are daily bills that have to be paid in order to stay in business.

ith the Association of Short Term Lenders recently reporting that bridging lending has exceeded £3bn in the 12 months to the end of June 2017, we are clearly in a thriving market and there are plenty of opportunities out there for lenders and introducers alike.

It’s also important to understand the customer. Have they done this sort of property project before and do they have adequate project management skills?

Looking at the existing loan, why won’t the incumbent lender provide an extension or further finance if required? Could it be that the existing lender has already provided one or both of these? If that is indeed the case, the new lender should question the credibility of the applicant.

It’s well documented that cashflow issues are the main reasons why businesses fail but not well documented enough to stop an increasing number of SMEs falling into the ‘cashflow trap’.

Just Cashflow ran a survey asking SME owners what they wished they had known more about before setting up in business and the number one answer was ‘cashflow management’.

Scott Marshall Managing director Roma Finance

For re-bridges, I would say there are opportunities out there, but it’s a case of proceeding with caution. There are several key questions that need clarifying when looking to progress a re-bridging case. For example, why wasn’t the original exit route adhered to? Perhaps the timescale of the loan was unrealistic in the first place? Or, where work was required to renovate or change the use of a building, were there unforeseen delays with building control or planning?

Innovative solutions to help your clients manage their cash flow

I would say there are opportunities out there, but it’s a case of proceeding with caution answered, can the new lender consider if it’s just a case of ‘throwing good money after bad’. In almost all the re-bridges we have done at Roma Finance, borrowers have injected additional money or security to allow us to get comfortable with the rebridge. We have also had cases where new people have come on to the transaction who have upskilled the project, to ensure timescales and budgets were adhered to.

Finally, it is of paramount importance to understand the exit route for the re-bridge.

As the loan needs to be fully repaid at the end of the term, there are ways to

monitor progress of the project, such as releasing stage payments and having regular inspections. After all, the original strategy didn’t materialise and so getting this right on a re-bridge is even more important than on a first-time bridging loan.

From an underwriting and application process point of view, you can see that although there are a lot of questions raised by a re-bridge, there are ways to get all the information required. Meeting the customer on site and going through each aspect of the loan will help get to the bottom of any issues and assess the viability of the deal.

Looking at the wider property market, we’ve been spoilt with the continuing rise in prices, which in many cases has made lending easier, as there has been an increasing amount of equity in the security over time. But now we’re seeing a slight easing in house price growth, economic uncertainties around Brexit, the impact of the PRA, stamp duty and income tax changes on landlords, which are all combining to make lending decisions that little bit more difficult.

However, decisions can be made, and with the right underwriting processes rebridges can be a viable form of lending.

Traditionally, a revolving credit line has been a business overdraft provided by a Bank but access to this type of businesses finance has been steadily reducing.

Alternative Lenders such as Just Cashflow have recognised this and they have introduced the Revolving Credit Facility (RCF) that works in the same way as a bank overdraft and allows growing companies to smooth out their peaks and troughs.

Interest is charged on a daily basis and there is no long-term commitment, so it provides complete flexibility for the borrower.

SMEs have to keep a lot of plates spinning at the same time and unfortunately having an accurate cashflow forecast and access to a flexible line of credit is one that is dropped too often.

For more information on how Just Cashflow’s solutions are ideally placed to help build businesses, call their Broker Support Team on 0121 418 5037 or visit justcashflow.com/partner

Get your clients across the finishing line 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 we are able to offer you tailored financial solutions to meet the requirements of your clients.

Our Revolving Credit Facility gives you access to funds from £10,000 to £500,000, for ambitious businesses, to support their continued growth.

You will find the application process really simple and straightforward and our underwriting team will support you, to help ensure you get even more clients across the finishing line.

Just call us now

0121 418 5037

Alternatively, find out more

justcashflow.com/partner

Patron Member FS668057

BCMS668054

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

OPINION & COMMENTARY

Leave no stone unturned for a re-bridge W

Only when these, and perhaps also other questions relevant to the case have been

54 | NACFB Magazine

This is why it is so important to have a funding solution in place and a revolving line of credit can be the ideal solution.

This is simply finance that your clients have approved access to.

They can draw down on these funds when the need arises and normally will only pay interest on the amount they have borrowed.

The advantage of a flexible line of credit is that unlike some other forms of business finance it doesn’t come with a set repayment plan that might not fit with the way cash flows in and out of a business.

Most companies suffer growing pains.

These can come in the form of finding sufficient funds to pay for stock and work in progress, the costs of marketing a new product or service and occasionally a

But there is also a need to remain vigilant when assessing new cases – after all, each case needs looking at on its own merits, and this is also very true of re-bridging applications.

Then we move on to looking at the property and what the customer is planning to do with it. For example, is the type of property, and the sale or rental price, in line with demand in the local area, so that a buyer or tenant can be found quickly?

debtor who is a slow or non-payer.

Any of these can stifle growth or cause severe cashflow issues.

Everything can look fine with a business plan. The order book is full, there are reliable suppliers and excellent opportunities for growth. However, the day to day reality is that future profits are largely irrelevant as there are daily bills that have to be paid in order to stay in business.

ith the Association of Short Term Lenders recently reporting that bridging lending has exceeded £3bn in the 12 months to the end of June 2017, we are clearly in a thriving market and there are plenty of opportunities out there for lenders and introducers alike.

It’s also important to understand the customer. Have they done this sort of property project before and do they have adequate project management skills?

Looking at the existing loan, why won’t the incumbent lender provide an extension or further finance if required? Could it be that the existing lender has already provided one or both of these? If that is indeed the case, the new lender should question the credibility of the applicant.

It’s well documented that cashflow issues are the main reasons why businesses fail but not well documented enough to stop an increasing number of SMEs falling into the ‘cashflow trap’.

Just Cashflow ran a survey asking SME owners what they wished they had known more about before setting up in business and the number one answer was ‘cashflow management’.

Scott Marshall Managing director Roma Finance

For re-bridges, I would say there are opportunities out there, but it’s a case of proceeding with caution. There are several key questions that need clarifying when looking to progress a re-bridging case. For example, why wasn’t the original exit route adhered to? Perhaps the timescale of the loan was unrealistic in the first place? Or, where work was required to renovate or change the use of a building, were there unforeseen delays with building control or planning?

Innovative solutions to help your clients manage their cash flow

I would say there are opportunities out there, but it’s a case of proceeding with caution answered, can the new lender consider if it’s just a case of ‘throwing good money after bad’. In almost all the re-bridges we have done at Roma Finance, borrowers have injected additional money or security to allow us to get comfortable with the rebridge. We have also had cases where new people have come on to the transaction who have upskilled the project, to ensure timescales and budgets were adhered to.

Finally, it is of paramount importance to understand the exit route for the re-bridge.

As the loan needs to be fully repaid at the end of the term, there are ways to

monitor progress of the project, such as releasing stage payments and having regular inspections. After all, the original strategy didn’t materialise and so getting this right on a re-bridge is even more important than on a first-time bridging loan.

From an underwriting and application process point of view, you can see that although there are a lot of questions raised by a re-bridge, there are ways to get all the information required. Meeting the customer on site and going through each aspect of the loan will help get to the bottom of any issues and assess the viability of the deal.

Looking at the wider property market, we’ve been spoilt with the continuing rise in prices, which in many cases has made lending easier, as there has been an increasing amount of equity in the security over time. But now we’re seeing a slight easing in house price growth, economic uncertainties around Brexit, the impact of the PRA, stamp duty and income tax changes on landlords, which are all combining to make lending decisions that little bit more difficult.

However, decisions can be made, and with the right underwriting processes rebridges can be a viable form of lending.

Traditionally, a revolving credit line has been a business overdraft provided by a Bank but access to this type of businesses finance has been steadily reducing.

Alternative Lenders such as Just Cashflow have recognised this and they have introduced the Revolving Credit Facility (RCF) that works in the same way as a bank overdraft and allows growing companies to smooth out their peaks and troughs.

Interest is charged on a daily basis and there is no long-term commitment, so it provides complete flexibility for the borrower.

SMEs have to keep a lot of plates spinning at the same time and unfortunately having an accurate cashflow forecast and access to a flexible line of credit is one that is dropped too often.

For more information on how Just Cashflow’s solutions are ideally placed to help build businesses, call their Broker Support Team on 0121 418 5037 or visit justcashflow.com/partner

Get your clients across the finishing line 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 we are able to offer you tailored financial solutions to meet the requirements of your clients.

Our Revolving Credit Facility gives you access to funds from £10,000 to £500,000, for ambitious businesses, to support their continued growth.

You will find the application process really simple and straightforward and our underwriting team will support you, to help ensure you get even more clients across the finishing line.

Just call us now

0121 418 5037

Alternatively, find out more

justcashflow.com/partner

Patron Member FS668057

BCMS668054

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

OPINION & COMMENTARY

If I had

OPINION & COMMENTARY

five

with the chancellor

Greg Carter CEO Growth Street

With the Autumn Budget fast approaching, someone recently posed an excellent question to me: if I had five minutes with the chancellor, what would I ask him?

56 | NACFB Magazine

minutes

O

f all the things I would love to change, there are two that really stick out.

The first is a small ask that could have a big impact. As CEO of a tech-enabled business, I am keenly aware of the role government subsidies have played in fostering technology-led innovation.

However, one factor risks undermining this progress: the fact that the R&D tax credits scheme doesn’t permit cloud computing costs as an allowable expense.

Brokers who work with Growth Street should know that we set great store by cloud computing. For instance, accessing customer data through cloud accounting platforms like Xero and QuickBooks has helped borrowers get access to finance far more quickly and easily.

In general, SMEs have never been more reliant on data. Much technology R&D requires processing enormous amounts – and more and more of this is processed on platforms like Amazon Web Services and Google’s Cloud Platform. We no longer rely on desktop computer towers. In fact, in the UK, investment in cloud computing is expected to grow at a rate six times faster than that of IT spending by 2020.

Cloud computing is relied upon by thousands of growing British businesses conducting cutting-edge research. But managing costs is increasingly difficult, even among mature cloud users, and legislation should be updated to reflect this. If the UK is to remain at the forefront of digital innovation, the government should consider making cloud computing costs a qualifying R&D expense.

My second ask is a radical proposition, but one that would act as a catalyst for confidence in businesses and the wider economy: let’s merge income tax and National Insurance (NI) contributions into a single tax.

NI contributions are largely tax by another name. The link between contributions and benefits has long been eroded. But with NI being calculated on a different

basis to income tax, I believe payroll calculations have become unnecessarily complex, creating increasing costs for businesses and confusion for employees.

full-time employees. As well as being bad for employees, this is bad for businesses in the long run: uncertain jobs create uncertain consumers.

And, there’s a more pernicious effect.

The way NI contributions are currently structured encourages the ‘casualisation’ of jobs. Employers are liable to pay less overall for labour if their workforces are full of contractors, rather than

Removing this unnecessary complication in the tax system could bring about a more confident economy and possibly help ease the UK’s productivity crisis.

It’s hard to overstate how important this could be to generating optimism for businesses and consumers.

Removing unnecessary complication in the tax system could help ease the UK’s productivity crisis

The brokers we partner with can see our confidence in small businesses and our commitment to giving growing companies innovative, flexible financing solutions.

We should have the same innovation and flexibility within the government if the UK is going to thrive in the coming years.

NACFB Magazine | 57

OPINION & COMMENTARY

If I had

OPINION & COMMENTARY

five

with the chancellor

Greg Carter CEO Growth Street

With the Autumn Budget fast approaching, someone recently posed an excellent question to me: if I had five minutes with the chancellor, what would I ask him?

56 | NACFB Magazine

minutes

O

f all the things I would love to change, there are two that really stick out.

The first is a small ask that could have a big impact. As CEO of a tech-enabled business, I am keenly aware of the role government subsidies have played in fostering technology-led innovation.

However, one factor risks undermining this progress: the fact that the R&D tax credits scheme doesn’t permit cloud computing costs as an allowable expense.

Brokers who work with Growth Street should know that we set great store by cloud computing. For instance, accessing customer data through cloud accounting platforms like Xero and QuickBooks has helped borrowers get access to finance far more quickly and easily.

In general, SMEs have never been more reliant on data. Much technology R&D requires processing enormous amounts – and more and more of this is processed on platforms like Amazon Web Services and Google’s Cloud Platform. We no longer rely on desktop computer towers. In fact, in the UK, investment in cloud computing is expected to grow at a rate six times faster than that of IT spending by 2020.

Cloud computing is relied upon by thousands of growing British businesses conducting cutting-edge research. But managing costs is increasingly difficult, even among mature cloud users, and legislation should be updated to reflect this. If the UK is to remain at the forefront of digital innovation, the government should consider making cloud computing costs a qualifying R&D expense.

My second ask is a radical proposition, but one that would act as a catalyst for confidence in businesses and the wider economy: let’s merge income tax and National Insurance (NI) contributions into a single tax.

NI contributions are largely tax by another name. The link between contributions and benefits has long been eroded. But with NI being calculated on a different

basis to income tax, I believe payroll calculations have become unnecessarily complex, creating increasing costs for businesses and confusion for employees.

full-time employees. As well as being bad for employees, this is bad for businesses in the long run: uncertain jobs create uncertain consumers.

And, there’s a more pernicious effect.

The way NI contributions are currently structured encourages the ‘casualisation’ of jobs. Employers are liable to pay less overall for labour if their workforces are full of contractors, rather than

Removing this unnecessary complication in the tax system could bring about a more confident economy and possibly help ease the UK’s productivity crisis.

It’s hard to overstate how important this could be to generating optimism for businesses and consumers.

Removing unnecessary complication in the tax system could help ease the UK’s productivity crisis

The brokers we partner with can see our confidence in small businesses and our commitment to giving growing companies innovative, flexible financing solutions.

We should have the same innovation and flexibility within the government if the UK is going to thrive in the coming years.

NACFB Magazine | 57

OPINION & COMMENTARY

Master brokers vital to getting us building Paul Day Sales development director Clever Lending

Online bridging valuations in an instant

In the government’s housing white paper, published in February 2017, it’s clear that it is keen to support the building of new houses across the UK – which is no surprise to those in the industry. However, what is key from the report is that the government is also keen on supporting smaller developers, who build lower volumes of houses, and also on helping those looking to enter the market.

To back this up, the government has launched a £45m land release fund to help ensure local councils release some of their unused or surplus land for housing. The aim is to transform local communities and release land for at least 160,000 homes by 2020.

With 40% of local planning authorities not having an up-to-date plan to meet the projected growth in their respective areas, the opportunity is there for niche developers to work on smaller projects, on parcels of land not wanted by the larger housebuilders. Another point of consideration is that there will be smaller builders, development sites or borrowing requirements that won’t fit the mainstream banks’ criteria. This is where the opportunities lie. Don’t miss them – they’re there if you look.

To build the homes we need, it’s vital there is a greater supply of land available to build them. Local authorities are major landowners and so have a crucial role to play in this.

The fact that the government wants to support smaller builders and more diverse housing is clearly an opportunity, but

58 | NACFB Magazine

developers may not be best served by the high street lenders and more flexible specialist finance will be required. Brokers can be proactive here and target those developers in need of guidance for the right financial solution, so I would urge them to go looking for them.

Master brokers, such as Clever Lending, can help not only in sourcing finance with expert product knowledge, but also handling the documentation and packaging of more complex projects. Every such case is different and expert underwriters are required to assess each case on its own merits, ultimately saving brokers time and moving the project along to completion as quickly as possible.

Developments need not be solely residential: they can include mixed-use developments, where part of the site is residential. This can be beneficial for the landlords as they can often get higher rents and yields on the commercial element, helping to make the overall scheme more viable.

There is also the opportunity within existing developments, and specialist finance can help developers capitalise on existing property renovations, such as offices and commercial buildings, and make them, or part of them, suitable for residential use.

Master brokers have experience and expertise aimed at helping brokers achieve the desired outcome for a variety of their clients, whether they are dealing with property developers, large companies or private individuals. Finding the right finance for their property developments needn’t be as daunting as it first seems.

Our online Automated Valuations (AVMs) for Bridging Finance can be generated in an instant to help your customers seal the deal faster. At only £99 at the point of application, they could save money too.

Automated valuations available subject to criteria Quick decisions to meet tight transaction deadlines Dedicated underwriter from DIP to completion If you wish to discuss a case please contact our Intermediary Support Team for more information.

So although there is a lot of work to do before a project can start, the opportunities are clearly there. After all, the government is keen to build and release land for new housing sites, and master brokers are there to help at every stage and to source the right lender for the project. This makes projects more viable than ever, so why not venture into the world of development, if you haven’t already, and create new opportunities for further growth.

Call us

0800 116 4385

Visit us

precisemortgages.co.uk

Follow us

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549).

Registered in England and Wales (company number 06749498). Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01848 (1)

W

e currently have a clear indication that the government is creating opportunities within the development sector that brokers should be looking to take advantage of.

OPINION & COMMENTARY

Master brokers vital to getting us building Paul Day Sales development director Clever Lending

Online bridging valuations in an instant

In the government’s housing white paper, published in February 2017, it’s clear that it is keen to support the building of new houses across the UK – which is no surprise to those in the industry. However, what is key from the report is that the government is also keen on supporting smaller developers, who build lower volumes of houses, and also on helping those looking to enter the market.

To back this up, the government has launched a £45m land release fund to help ensure local councils release some of their unused or surplus land for housing. The aim is to transform local communities and release land for at least 160,000 homes by 2020.

With 40% of local planning authorities not having an up-to-date plan to meet the projected growth in their respective areas, the opportunity is there for niche developers to work on smaller projects, on parcels of land not wanted by the larger housebuilders. Another point of consideration is that there will be smaller builders, development sites or borrowing requirements that won’t fit the mainstream banks’ criteria. This is where the opportunities lie. Don’t miss them – they’re there if you look.

To build the homes we need, it’s vital there is a greater supply of land available to build them. Local authorities are major landowners and so have a crucial role to play in this.

The fact that the government wants to support smaller builders and more diverse housing is clearly an opportunity, but

58 | NACFB Magazine

developers may not be best served by the high street lenders and more flexible specialist finance will be required. Brokers can be proactive here and target those developers in need of guidance for the right financial solution, so I would urge them to go looking for them.

Master brokers, such as Clever Lending, can help not only in sourcing finance with expert product knowledge, but also handling the documentation and packaging of more complex projects. Every such case is different and expert underwriters are required to assess each case on its own merits, ultimately saving brokers time and moving the project along to completion as quickly as possible.

Developments need not be solely residential: they can include mixed-use developments, where part of the site is residential. This can be beneficial for the landlords as they can often get higher rents and yields on the commercial element, helping to make the overall scheme more viable.

There is also the opportunity within existing developments, and specialist finance can help developers capitalise on existing property renovations, such as offices and commercial buildings, and make them, or part of them, suitable for residential use.

Master brokers have experience and expertise aimed at helping brokers achieve the desired outcome for a variety of their clients, whether they are dealing with property developers, large companies or private individuals. Finding the right finance for their property developments needn’t be as daunting as it first seems.

Our online Automated Valuations (AVMs) for Bridging Finance can be generated in an instant to help your customers seal the deal faster. At only £99 at the point of application, they could save money too.

Automated valuations available subject to criteria Quick decisions to meet tight transaction deadlines Dedicated underwriter from DIP to completion If you wish to discuss a case please contact our Intermediary Support Team for more information.

So although there is a lot of work to do before a project can start, the opportunities are clearly there. After all, the government is keen to build and release land for new housing sites, and master brokers are there to help at every stage and to source the right lender for the project. This makes projects more viable than ever, so why not venture into the world of development, if you haven’t already, and create new opportunities for further growth.

Call us

0800 116 4385

Visit us

precisemortgages.co.uk

Follow us

FOR INTERMEDIARY USE ONLY.

Precise Mortgages is a trading name of Charter Court Financial Services Limited which is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority (Financial Services Register Firm Reference Number 494549).

Registered in England and Wales (company number 06749498). Registered office: 2 Charter Court, Broadlands, Wolverhampton WV10 6TD.

01848 (1)

W

e currently have a clear indication that the government is creating opportunities within the development sector that brokers should be looking to take advantage of.

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