Afterthemaelstrom CapitalRise: Widening

Lyndon Miles Lending Director CapitalRise

COVID-19 has presented an unexpected opportunity for alternative investment providers. Empowered by resourceful and experienced brokers, we are able to fulfil a clear finance gap left by traditional lenders who have hit the pause button during this period of uncertainty. As a specialist lender to prime property developers in London and the South East we regularly work with brokers across the space that connect us with their network of experienced developers. For some brokers, the pandemic has pushed them to widen their scope to include a new type of lender.

Long before the coronavirus crisis, the dynamic between lender and broker was changing anyway. Since the 2008 financial crash, many banks have withdrawn from property lending, reduced leverage or made requirements to secure loans more troublesome. As a result of this, a number of alternative (non-bank) property lenders have emerged. While, previously, borrowers may have had only one or a few sources of funding, there are now numerous ones, each offering a plethora of different funding options. With this wide range, it is the job of the broker to look beyond traditional sources to get the best deal for the borrower. As we service a very particular area of lending, the prime property market, often our role can be to guide brokers on the nuances – including the risks, opportunities – distinctive in this space.

While remaining an aspirational and fruitful market, the prime market is specialised and requires highly specialised knowledge. It is not an easy market to just jump into. The time and effort required to fully understand this market is considerable, relative to the rewards available of course. There are unlikely to be brokers specifically catering for prime, however this space is unique, a niche within an already niche market you could say, which means it presents unique benefits and we’re proud to work with brokers who do the leg work and understand this sector.

A key change has been the pandemic’s impact on credit criteria. Leverage has been reduced and pricing has increased, overall, it has become more difficult to get lenders to lend. The only expectation in the changing situation is more changes. In recent weeks, some LTVs are increasing to pre-lockdown levels and some lenders that had fallen over and withdrawn have returned to market. Time to closing is looking to reduce after it increased with the impossibility of site visits, another recent development. The broker is playing a crucial role of navigating these circumstances on behalf of the perhaps concerned borrower.

COVID-19 has changed the dynamic between lenders and brokers. This situation has been unpredictable, and many lenders were not prepared to adapt and exercised exaggerated caution. Committed lenders have even pulled out of deals at the eleventh hour, which has left brokers scrambling for effective solutions. With fewer lenders, and some of those that do remain demonstrating a reduced appetite, brokers have had to approach lenders they may have previously overlooked. For us, and other alternate finance providers, this is good news as we build new business relationships. “ Committed lenders have even pulled out of deals at the eleventh hour, which has left brokers scrambling for effective solutions

As one of the first non-bank lenders approved by the British Business Bank to provide term loans through CBILS, we are opening the scheme to new borrowers. Mid-sized businesses impacted by coronavirus can now benefit from our bespoke funding solutions including government payment of the first 12 months’ interest plus legal and lender fees.

• Working capital • Investment • Growth capital • Refinancing existing loans • Acquisitions (exc MBOs, MBIs) Find out more at

The Coronavirus Business Interruption Loan Scheme (CBILS) is managed by the British Business Bank on behalf of, and with the fi nancial backing of the Secretary of State for Business, Energy and Industrial Strategy (BEIS). Borrowers remain fully liable for the debt. Full details on CBILS and the list of participating CBILS lenders can be found at www. british-business-bank.co.uk. ThinCats is a trading name of the ThinCats Group, c/o ESF Capital Limited (Registered in England and Wales No. 09707863) 2nd Floor, Newlands House, 40 Berners Street, London W1T 3NA.