Octane Capital
foreword
Specialist Lending 2.0 by Mark Posniak, Managing Director, Octane Capital
Do you remember the good old days of commercial lending when customers had an actual relationship with their bank manager?
In those simpler times it was the relationship that dominated who borrowed what— especially when it came to property. Over a call, coffee or lunch or, dare I say, drinks, a prospective borrower would set out the details of their project proposal and within minutes they’d have an answer on whether the deal would work for the lender. Then, not only was the relationship and the trust that went with that key, but so was flexibility. It was a quid pro quo of sorts in that the lender trusted the client and, in return, extended deal terms and parameters that reflected that trust. It was called ‘individual discretion’. But since the financial crisis, traditional lenders and even so-called specialist funders have pulled up the drawbridge on individual discretion, preferring instead a computer-led approach that comes with a series of hoops to jump through. Crucially, if just one ‘hoop’ is missed, the whole case falls over. Yes, commercial customer property lending is now a one-size-fits-all, tick-box exercise that focuses on risk aversion and ‘backside covering’ as its modus operandi—once again, particularly applying to the property space.
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