NACFB Magazine - April 2017

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Issue 45 April 2017

The magazine for the National Association of Commercial Finance Brokers

Spring Budget 2017: An olive branch reform for small businesses?

In this issue

Funding outside the London bubble Are regionally-based companies less likely to gain funding?

On the blazing trail of proptech Two Patrons discuss the pros, cons and effects on the commercial mortgage sector

Loan support schemes

How Brexit has created and evolved governmentbacked finance opportunities

Welcome | NACFB Arriving at Hamilton House about five months ago, I knew 2017 would be a very special year for the Association and I’ve never known such a busy time. The start of the year is always flat-out for the NACFB, especially as we prepare for the two biggest events in the commercial finance industry calendar – the Commercial Finance Expo and NACFB gala dinner of course!

Property finance, the way it should be.

Many stands and tables have already been booked at our Expo and gala dinner and it’s been an encouragement to see such an early take-up for what are going to be even bigger and better events this year. If you’re not yet booked, crack on to avoid disappointment!

I also held our first Patrons’ Day which was a great success, and Norman Chambers has been out and about leading the first of our Commercial Finance Roadshows. I’d like to thank the Hamilton House team for their tireless efforts in respect of all the NACFB’s events.

Compliance continues to be a hot topic and I’ve enjoyed engaging further with our Patrons in the ambitious plans the Association has to develop and evolve further as we grow and gear up to provide increasingly relevant compliance services via our new compliance division.

Unfortunately, awareness of consumer credit regulations remains mixed amongst some lenders and some brokers, so you may have noticed me taking a tougher stance in the trade press on the relevance of the NACFB to Members and Patrons in highlighting the standards we expect. I’ve enjoyed good feedback from Patrons and Members alike that this approach is welcomed.

So, grab a coffee and enjoy your next edition of the NACFB Magazine.

octopusproperty.com Octopus Property is the trading name of Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Rednel Ltd (Reg No 7531926) and Octopus Co-Lend Limited (Reg No 8913299), Registered Office: 33 Holborn, London EC1N 2HT, registered in England and Wales and Dragonfly Finance S.ar.l. (Reg No B189290) Registered Office: Parc d’Activité Syrdall, 6 Rue Gabriel Lippmann, L-5365, Munsbach, Luxembourg registered in Luxembourg. Rednel Ltd and Octopus Co-Lend Limited are authorised and regulated by the Financial Conduct Authority.

Rob Lankey Chief Executive

Rob Lankey CEO NACFB

In this April issue NACFB News 4 4 6 7 7

In the press Compliance update Events - CFE 2017 Notes from our sponsor Dates for your diary

Commercial Finance 8-10

Essential news bites

Top Story 12

Retention proc fees on the rise

Introducing 14

Octopus Property launches major product overhaul

Case Studies 16 18 20 22

D&D’s cross-border finance deal Beyond the bank Helping smaller developers achieve better margins 11 minutes can make all the difference

Cover Story 24-27 Spring Budget 2017: An olive branch reform for small businesses?

Ask the Expert 30-31 Gavin Diamond

Special Features 32-33 SME funding outside the London bubble 34 Islamic finance: ‘An obvious gap in the market’ 36 Five reasons that IFIsas will increase investment in alternative finance 38 Loan support schemes and the Brexit opportunity

Industry Guides 40 42

Financing the education sector The flexibility of cash flow finance

Debate 44-45 On the blazing trail of proptech

Opinion & Commentary 46-47 The rising stars of regional planning 48 Why professional indemnity insurance?

50 What’s driving asset finance growth?

Patron Profile 28-29 LendingCrowd: 80 years’ worth of experience in funding

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

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

NACFB Magazine | 3

Welcome | NACFB Arriving at Hamilton House about five months ago, I knew 2017 would be a very special year for the Association and I’ve never known such a busy time. The start of the year is always flat-out for the NACFB, especially as we prepare for the two biggest events in the commercial finance industry calendar – the Commercial Finance Expo and NACFB gala dinner of course!

Property finance, the way it should be.

Many stands and tables have already been booked at our Expo and gala dinner and it’s been an encouragement to see such an early take-up for what are going to be even bigger and better events this year. If you’re not yet booked, crack on to avoid disappointment!

I also held our first Patrons’ Day which was a great success, and Norman Chambers has been out and about leading the first of our Commercial Finance Roadshows. I’d like to thank the Hamilton House team for their tireless efforts in respect of all the NACFB’s events.

Compliance continues to be a hot topic and I’ve enjoyed engaging further with our Patrons in the ambitious plans the Association has to develop and evolve further as we grow and gear up to provide increasingly relevant compliance services via our new compliance division.

Unfortunately, awareness of consumer credit regulations remains mixed amongst some lenders and some brokers, so you may have noticed me taking a tougher stance in the trade press on the relevance of the NACFB to Members and Patrons in highlighting the standards we expect. I’ve enjoyed good feedback from Patrons and Members alike that this approach is welcomed.

So, grab a coffee and enjoy your next edition of the NACFB Magazine.

octopusproperty.com Octopus Property is the trading name of Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Rednel Ltd (Reg No 7531926) and Octopus Co-Lend Limited (Reg No 8913299), Registered Office: 33 Holborn, London EC1N 2HT, registered in England and Wales and Dragonfly Finance S.ar.l. (Reg No B189290) Registered Office: Parc d’Activité Syrdall, 6 Rue Gabriel Lippmann, L-5365, Munsbach, Luxembourg registered in Luxembourg. Rednel Ltd and Octopus Co-Lend Limited are authorised and regulated by the Financial Conduct Authority.

Rob Lankey Chief Executive

Rob Lankey CEO NACFB

In this April issue NACFB News 4 4 6 7 7

In the press Compliance update Events - CFE 2017 Notes from our sponsor Dates for your diary

Commercial Finance 8-10

Essential news bites

Top Story 12

Retention proc fees on the rise

Introducing 14

Octopus Property launches major product overhaul

Case Studies 16 18 20 22

D&D’s cross-border finance deal Beyond the bank Helping smaller developers achieve better margins 11 minutes can make all the difference

Cover Story 24-27 Spring Budget 2017: An olive branch reform for small businesses?

Ask the Expert 30-31 Gavin Diamond

Special Features 32-33 SME funding outside the London bubble 34 Islamic finance: ‘An obvious gap in the market’ 36 Five reasons that IFIsas will increase investment in alternative finance 38 Loan support schemes and the Brexit opportunity

Industry Guides 40 42

Financing the education sector The flexibility of cash flow finance

Debate 44-45 On the blazing trail of proptech

Opinion & Commentary 46-47 The rising stars of regional planning 48 Why professional indemnity insurance?

50 What’s driving asset finance growth?

Patron Profile 28-29 LendingCrowd: 80 years’ worth of experience in funding

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

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

NACFB Magazine | 3

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

In the press

Rob Lankey, CEO of the NACFB, commented on the chancellor’s spring Budget announcement:

“It was feared that the government’s decision to finally scratch its sevenyear itch and revalue business rates would fall like a ton of bricks on many small businesses across the country.

been steadily increasing, even in the light of Brexit-induced uncertainty - it would be severely damaging if business rates were the straw that broke the camel’s back.

“Today’s [8th March] comments from Hammond will go some way to calm these fears - notably amongst publicans and growing companies losing small business rate relief.

“While increasing the frequency of business rate revaluations will help to soften the blow of such sharp rises in the future, small businesses will applaud greater clarity on how today’s mooted consultations and plans - such as the discretionary relief fund for local councils - will actually play out in the real world.”

“For many though, this revaluation will still significantly increase how much they pay on rateable properties, especially those in the South East and London - costs which a good number of businesses will simply not be able to absorb.

“While the chancellor’s comments have brought a degree of clarity, the prospect of sheer and sudden increases from April for a large number of businesses could dampen growth intentions.

“As we’ve seen on the ground, small business appetite for funding has

Our peer-to-peer insurance launch in March also attracted a good deal of interest. Following a milestone meeting with broker Towergate Insurance, leading Lloyd’s of London insurer Beazley and Funding Circle, we can now offer exclusive cover - the only policy in the market specifically designed for commercial finance brokers to cover an unlimited amount of brokered loans with peer-to-peer lenders.

A long overdue process to specifically review our standards relating to commercial activity. Comforting to find out we were on the right track using a mainly regulated formula.”

Kevin Orchard, Bluechip Financial Ltd

Every Member receives a copy of their review, following their visit, with recommendations where necessary, which is proving to be of great value as the testimonials below demonstrate: It was fantastic to have a professional and independent assessment of our compliance regime.”

Matthew Arena, Brilliant Solutions

4 | NACFB Magazine

In our continued effort to support the commercial finance broker, in line with the launch of the new NACFB website in March this year, NACFB compliance services has now launched its own separate compliance website nacfbcompliance.co.uk to support Members specifically with regulatory requirements and with the NACFB minimum standards.

Maximise profits for your client by replacing costly development finance with flexible, low costing funding.

To find out more, speak to Magnus today about Development Exit on 020 7118 1133 or visit: intermediaries.lendinvest.com 0.7% interest pcm

Compliance update Since September our field consultants have visited over 300 Member firms across the country, reviewing and helping to improve structures and processes within these businesses, in line with our published minimum standards.

Hefty extension penalties? Switch to cheaper funding.

Rolled or serviced payments available Loans between £250k to £5m We want to hear from you!

LTV up to 70% Please take a moment to fill out our magazine reader survey online. It only takes a few minutes, and will help us to keep providing you with the content you want to see.

Head to>> nacfbnewsletter.co.uk/ nacfb-magazine/survey Let us know what you think!

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

For intermediaries only.

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

In the press

Rob Lankey, CEO of the NACFB, commented on the chancellor’s spring Budget announcement:

“It was feared that the government’s decision to finally scratch its sevenyear itch and revalue business rates would fall like a ton of bricks on many small businesses across the country.

been steadily increasing, even in the light of Brexit-induced uncertainty - it would be severely damaging if business rates were the straw that broke the camel’s back.

“Today’s [8th March] comments from Hammond will go some way to calm these fears - notably amongst publicans and growing companies losing small business rate relief.

“While increasing the frequency of business rate revaluations will help to soften the blow of such sharp rises in the future, small businesses will applaud greater clarity on how today’s mooted consultations and plans - such as the discretionary relief fund for local councils - will actually play out in the real world.”

“For many though, this revaluation will still significantly increase how much they pay on rateable properties, especially those in the South East and London - costs which a good number of businesses will simply not be able to absorb.

“While the chancellor’s comments have brought a degree of clarity, the prospect of sheer and sudden increases from April for a large number of businesses could dampen growth intentions.

“As we’ve seen on the ground, small business appetite for funding has

Our peer-to-peer insurance launch in March also attracted a good deal of interest. Following a milestone meeting with broker Towergate Insurance, leading Lloyd’s of London insurer Beazley and Funding Circle, we can now offer exclusive cover - the only policy in the market specifically designed for commercial finance brokers to cover an unlimited amount of brokered loans with peer-to-peer lenders.

A long overdue process to specifically review our standards relating to commercial activity. Comforting to find out we were on the right track using a mainly regulated formula.”

Kevin Orchard, Bluechip Financial Ltd

Every Member receives a copy of their review, following their visit, with recommendations where necessary, which is proving to be of great value as the testimonials below demonstrate: It was fantastic to have a professional and independent assessment of our compliance regime.”

Matthew Arena, Brilliant Solutions

4 | NACFB Magazine

In our continued effort to support the commercial finance broker, in line with the launch of the new NACFB website in March this year, NACFB compliance services has now launched its own separate compliance website nacfbcompliance.co.uk to support Members specifically with regulatory requirements and with the NACFB minimum standards.

Maximise profits for your client by replacing costly development finance with flexible, low costing funding.

To find out more, speak to Magnus today about Development Exit on 020 7118 1133 or visit: intermediaries.lendinvest.com 0.7% interest pcm

Compliance update Since September our field consultants have visited over 300 Member firms across the country, reviewing and helping to improve structures and processes within these businesses, in line with our published minimum standards.

Hefty extension penalties? Switch to cheaper funding.

Rolled or serviced payments available Loans between £250k to £5m We want to hear from you!

LTV up to 70% Please take a moment to fill out our magazine reader survey online. It only takes a few minutes, and will help us to keep providing you with the content you want to see.

Head to>> nacfbnewsletter.co.uk/ nacfb-magazine/survey Let us know what you think!

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

For intermediaries only.

NACFB NEWS

NACFB NEWS

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

Spring is upon us and – with Q1 2017 over – it feels like a good time to take stock and assess how the year has progressed thus far.

CFE 2017 The eighth Commercial Finance Expo is just three months away and we already have more exhibiting companies signed up than at any previous event.

Our exhibiting lenders cover every letter of the alphabet apart from V, X and Z. They span the widest crosssection of the market, making this the largest finance show for intermediaries in the country.

The NACFB Commercial Finance Expo is the industryleading event for anyone involved in finance brokerage, which is why Funding Circle is excited to be sponsoring for the 4th year in a row – particularly in celebration of the NACFB’s 25th anniversary. The Expo has gone from strength to strength over the years and presents a great opportunity to meet with hundreds of brokers from all over the country.”

Tom Shave, business development manager, Funding Circle

6 | NACFB Magazine

Our sponsors are looking forward to being a part of our 25th anniversary celebrations:

LeaseTeam is a proud sponsor of the Commercial Finance Expo Members’ lounge. We’re happy to support such an engaging and thought-provoking event. The Expo always provides a great opportunity to network and discuss important industry topics.”

Brent Walmsley, UK business development leader, LeaseTeam Solutions Ltd

The market continues to perform well with positive business levels providing some useful momentum as we approach the summer months.

As predicted, the chancellor’s spring Budget announcement was kinder to property investors and landlords than the policies enacted by his predecessor in 2016. However, the events of June 2016 on the national stage and those of November 2016 on the global stage prove that we should always expect the unexpected. There should be a drive to educate as many as possible, providing clarity around the significant events of 2016 if we are all to continue to build and grow throughout this year and beyond.

In addition to the shifting tax regime, the PRA’s new buy-to-let standards have also been in place for over three months now, providing ample time for lenders to set out their stall for intermediaries and their clients. I have referenced the approach Shawbrook took in this column before, first consulting with our brokers back in September 2016 before adapting what was already a very robust and transparent process. Maintaining a commitment to supporting the market via one’s own communication efforts and those of associations such as the NACFB is a crucial part of ensuring this industry remains focused on positive customer outcomes, protecting all stakeholders in an environment with far greater scrutiny.

Those investors with plans to grow in a sustainable way – sacrificing pace of growth for lower gearing – will perhaps be better positioned to take advantage of the changing market conditions.

We would always advise any investor that one of the most important strings to one’s bow is to have a good team around you providing the right advice in what are several specialist areas. Tax advice and a professional mortgage broker (particularly early in the process) would be the first numbers to call,

Dates for your diary Compliance Workshops When: 18, 19, 25th April Where: South - various locations – please see our website NACFB & Barcadia Commercial Finance Roadshows When: 23-26th May Where: South - Devon, Southampton, Gatwick, Milton Keynes Summer drinks reception When: 20th June Where: Genting Hotel, Birmingham Commercial Finance Expo When: 21st June Where: NEC Birmingham NACFB & Barcadia Commercial Finance Roadshows When: 17-20th October Where: East - various locations AGM at the Finance Professional Show When: 8th November Where: Olympia, London Gala Dinner & Industry Awards When: 30th November Where: Park Plaza Westminster Bridge, London and the NACFB is one of the most vocal proponents of the value of this distribution channel for the customer.

Although the new underwriting standards have presented their own challenges, these should be viewed in a positive light. The new rules aim to protect customers, ensuring they have a loan appropriate to their needs which remains affordable, should underlying market conditions change.

Organisations such as the NACFB – with a strong customer ethos that promotes transparency among lenders and brokers alike – will continue to play a fundamental role in guiding their Patrons through significant changes and we look forward to continuing our close relationship with them.

NACFB Magazine | 7

NACFB NEWS

NACFB NEWS

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

Spring is upon us and – with Q1 2017 over – it feels like a good time to take stock and assess how the year has progressed thus far.

CFE 2017 The eighth Commercial Finance Expo is just three months away and we already have more exhibiting companies signed up than at any previous event.

Our exhibiting lenders cover every letter of the alphabet apart from V, X and Z. They span the widest crosssection of the market, making this the largest finance show for intermediaries in the country.

The NACFB Commercial Finance Expo is the industryleading event for anyone involved in finance brokerage, which is why Funding Circle is excited to be sponsoring for the 4th year in a row – particularly in celebration of the NACFB’s 25th anniversary. The Expo has gone from strength to strength over the years and presents a great opportunity to meet with hundreds of brokers from all over the country.”

Tom Shave, business development manager, Funding Circle

6 | NACFB Magazine

Our sponsors are looking forward to being a part of our 25th anniversary celebrations:

LeaseTeam is a proud sponsor of the Commercial Finance Expo Members’ lounge. We’re happy to support such an engaging and thought-provoking event. The Expo always provides a great opportunity to network and discuss important industry topics.”

Brent Walmsley, UK business development leader, LeaseTeam Solutions Ltd

The market continues to perform well with positive business levels providing some useful momentum as we approach the summer months.

As predicted, the chancellor’s spring Budget announcement was kinder to property investors and landlords than the policies enacted by his predecessor in 2016. However, the events of June 2016 on the national stage and those of November 2016 on the global stage prove that we should always expect the unexpected. There should be a drive to educate as many as possible, providing clarity around the significant events of 2016 if we are all to continue to build and grow throughout this year and beyond.

In addition to the shifting tax regime, the PRA’s new buy-to-let standards have also been in place for over three months now, providing ample time for lenders to set out their stall for intermediaries and their clients. I have referenced the approach Shawbrook took in this column before, first consulting with our brokers back in September 2016 before adapting what was already a very robust and transparent process. Maintaining a commitment to supporting the market via one’s own communication efforts and those of associations such as the NACFB is a crucial part of ensuring this industry remains focused on positive customer outcomes, protecting all stakeholders in an environment with far greater scrutiny.

Those investors with plans to grow in a sustainable way – sacrificing pace of growth for lower gearing – will perhaps be better positioned to take advantage of the changing market conditions.

We would always advise any investor that one of the most important strings to one’s bow is to have a good team around you providing the right advice in what are several specialist areas. Tax advice and a professional mortgage broker (particularly early in the process) would be the first numbers to call,

Dates for your diary Compliance Workshops When: 18, 19, 25th April Where: South - various locations – please see our website NACFB & Barcadia Commercial Finance Roadshows When: 23-26th May Where: South - Devon, Southampton, Gatwick, Milton Keynes Summer drinks reception When: 20th June Where: Genting Hotel, Birmingham Commercial Finance Expo When: 21st June Where: NEC Birmingham NACFB & Barcadia Commercial Finance Roadshows When: 17-20th October Where: East - various locations AGM at the Finance Professional Show When: 8th November Where: Olympia, London Gala Dinner & Industry Awards When: 30th November Where: Park Plaza Westminster Bridge, London and the NACFB is one of the most vocal proponents of the value of this distribution channel for the customer.

Although the new underwriting standards have presented their own challenges, these should be viewed in a positive light. The new rules aim to protect customers, ensuring they have a loan appropriate to their needs which remains affordable, should underlying market conditions change.

Organisations such as the NACFB – with a strong customer ethos that promotes transparency among lenders and brokers alike – will continue to play a fundamental role in guiding their Patrons through significant changes and we look forward to continuing our close relationship with them.

NACFB Magazine | 7

At home

Commercial Finance | news

with regulated loans

Essential news bites from the world of commercial finance NACFB CFE attracts over 100 exhibitors

The NACFB has revealed that over 100 companies have booked to exhibit at this year’s Commercial Finance Expo (CFE).

The event – which takes place on 21st June – has been moved to the larger Hall 3a at Birmingham’s NEC after outgrowing its previous space.

Visitors will be greeted by 4,000 sq m of financial expertise, as well as a newlook members’ lounge.

The CFE allows visitors to find out more about the huge amount of funding available to businesses across the country.

Last year, the NACFB celebrated a record Expo with 1,700 attendees.

P2P platform partners with Facebook chatbot

Peer-to-peer (P2P) lending platform RateSetter has partnered with a Facebook chatbot to allow users to invest via messenger.

Personal savings assistant Plum helps consumers put their money to work by analysing spending patterns, income and bills, and setting aside a small amount of money every few days.

The new partnership will enable consumers to invest these savings on RateSetter through the Plum messenger interface, putting their capital at risk for a potentially higher rate of interest.

FCA agrees new fintech partnership

The FCA and the Ontario Securities Commission have signed a co-operation agreement to refer to

8 | NACFB Magazine

one another fintech businesses seeking to enter the other’s market.

As part of the agreement, the regulators will provide support to innovative businesses in each other’s markets to reduce regulatory uncertainty, and share information on emerging trends and regulatory issues regarding innovation in financial services.

Businesses will have access to dedicated staff to help them understand the regulatory framework of the market they wish to join.

Active conveyancing firms rise for the first time in five years

The total number of conveyancing firms operating in the market has risen for the first time in five years.

CEO of P2P business lender ArchOver, revealed that some banks were now directing borrowers they themselves cannot serve to alternative finance providers rather than rejecting them outright.

“If you go back two-and-a-half, three years, banks were very much: ‘You’re here to eat our lunch, we’re not going to talk to you,’” Angus explained.

“But that attitude has gone completely around the other way, because what the banks have come to realise is that these smaller organisations – and it’s to do with our size more than anything else – were nimbler.”

RBS to replace Williams & Glyn sale with £750m challenger bank fund

Search Acumen’s Conveyancing Market Tracker revealed that during 2016, the number of conveyancing firms rose by 4% to 5,572.

The government has proposed a new plan which could see RBS provide £750m to boost competition in the UK business banking sector.

Over the past five years, the number of conveyancing firms has declined and despite last year’s rise, there has been a 28% drop in the number of firms over the past 10 years.

The idea, put forward by HM Treasury, will come as part of the bank’s state aid commitments agreed with the European Commission in 2009 that RBS would carry out five major divestments.

However, Search Acumen found that in 2016 the market had completed the highest number of conveyancing volumes since the prefinancial crisis peak in 2007.

Banks warm to alternative finance providers

Larger banks have begun to realise the value of collaborating with alternative business lenders, a peer-to-peer (P2P) platform has claimed.

Speaking at Fintech Fortnight on 16th February, Angus Dent,

Four have been successfully implemented, but the fifth – the sale of Williams & Glyn – has been unsuccessful due to external factors.

The new plan will see RBS create a fund, administered by an independent body, which will be available for eligible challenger banks to help them incentivise SMEs to switch their accounts from RBS.

SMEs fail to utilise asset-based lending

Almost three-quarters (72%)

of SMEs are not aware of opportunities to secure funding based on their turnover, according to a new study by Close Brothers Invoice Finance.

We are Principal Lenders and provide first and second charge residential loans, regulated and non-regulated, from £250,000 up to £10m. Up to 75% LTV and interest rates from 0.65% p.m.

While 44% of SMEs claimed they would consider assetbased lending over a loan or an overdraft, only 16% said it was their ideal form of business finance.

NON-REGULATED • REGULATED • REFINANCE • PURCHASE • IMPROVEMENT

Close Brothers also found that 69% of SMEs with an annual turnover of £10m or more have capital tied up in assets such as plants, machinery, property and stock.

Brokers divided over BoE base rate rise

Only 2% of brokers expect the Bank of England (BoE) base rate to increase in the first half of 2017.

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A poll of 230 finance brokers conducted by United Trust Bank found that 28% believed the rate would increase in the second half of 2017, while an almost identical 27% expected it to come in the first six months of next year.

A further one-quarter of respondents suggested the BoE would wait until the latter half of 2018, while 18% predicted 2019 or beyond.

New commercial property platform to transform due diligence process

A new online platform dedicated to kick-start commercial property transactions has been launched.

Search Acumen’s online platform is designed to transform the due diligence process by providing real estate lawyers with instant access to commercial property data sets, giving them the ability to conduct

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Let’s Talk!

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

COM M E R C IAL

•

R E SIDE N T IAL

•

A PRINCIPAL LENDER

DE V E LOPM ENT

At home

Commercial Finance | news

with regulated loans

Essential news bites from the world of commercial finance NACFB CFE attracts over 100 exhibitors

The NACFB has revealed that over 100 companies have booked to exhibit at this year’s Commercial Finance Expo (CFE).

The event – which takes place on 21st June – has been moved to the larger Hall 3a at Birmingham’s NEC after outgrowing its previous space.

Visitors will be greeted by 4,000 sq m of financial expertise, as well as a newlook members’ lounge.

The CFE allows visitors to find out more about the huge amount of funding available to businesses across the country.

Last year, the NACFB celebrated a record Expo with 1,700 attendees.

P2P platform partners with Facebook chatbot

Peer-to-peer (P2P) lending platform RateSetter has partnered with a Facebook chatbot to allow users to invest via messenger.

Personal savings assistant Plum helps consumers put their money to work by analysing spending patterns, income and bills, and setting aside a small amount of money every few days.

The new partnership will enable consumers to invest these savings on RateSetter through the Plum messenger interface, putting their capital at risk for a potentially higher rate of interest.

FCA agrees new fintech partnership

The FCA and the Ontario Securities Commission have signed a co-operation agreement to refer to

8 | NACFB Magazine

one another fintech businesses seeking to enter the other’s market.

As part of the agreement, the regulators will provide support to innovative businesses in each other’s markets to reduce regulatory uncertainty, and share information on emerging trends and regulatory issues regarding innovation in financial services.

Businesses will have access to dedicated staff to help them understand the regulatory framework of the market they wish to join.

Active conveyancing firms rise for the first time in five years

The total number of conveyancing firms operating in the market has risen for the first time in five years.

CEO of P2P business lender ArchOver, revealed that some banks were now directing borrowers they themselves cannot serve to alternative finance providers rather than rejecting them outright.

“If you go back two-and-a-half, three years, banks were very much: ‘You’re here to eat our lunch, we’re not going to talk to you,’” Angus explained.

“But that attitude has gone completely around the other way, because what the banks have come to realise is that these smaller organisations – and it’s to do with our size more than anything else – were nimbler.”

RBS to replace Williams & Glyn sale with £750m challenger bank fund

Search Acumen’s Conveyancing Market Tracker revealed that during 2016, the number of conveyancing firms rose by 4% to 5,572.

The government has proposed a new plan which could see RBS provide £750m to boost competition in the UK business banking sector.

Over the past five years, the number of conveyancing firms has declined and despite last year’s rise, there has been a 28% drop in the number of firms over the past 10 years.

The idea, put forward by HM Treasury, will come as part of the bank’s state aid commitments agreed with the European Commission in 2009 that RBS would carry out five major divestments.

However, Search Acumen found that in 2016 the market had completed the highest number of conveyancing volumes since the prefinancial crisis peak in 2007.

Banks warm to alternative finance providers

Larger banks have begun to realise the value of collaborating with alternative business lenders, a peer-to-peer (P2P) platform has claimed.

Speaking at Fintech Fortnight on 16th February, Angus Dent,

Four have been successfully implemented, but the fifth – the sale of Williams & Glyn – has been unsuccessful due to external factors.

The new plan will see RBS create a fund, administered by an independent body, which will be available for eligible challenger banks to help them incentivise SMEs to switch their accounts from RBS.

SMEs fail to utilise asset-based lending

Almost three-quarters (72%)

of SMEs are not aware of opportunities to secure funding based on their turnover, according to a new study by Close Brothers Invoice Finance.

We are Principal Lenders and provide first and second charge residential loans, regulated and non-regulated, from £250,000 up to £10m. Up to 75% LTV and interest rates from 0.65% p.m.

While 44% of SMEs claimed they would consider assetbased lending over a loan or an overdraft, only 16% said it was their ideal form of business finance.

NON-REGULATED • REGULATED • REFINANCE • PURCHASE • IMPROVEMENT

Close Brothers also found that 69% of SMEs with an annual turnover of £10m or more have capital tied up in assets such as plants, machinery, property and stock.

Brokers divided over BoE base rate rise

Only 2% of brokers expect the Bank of England (BoE) base rate to increase in the first half of 2017.

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A poll of 230 finance brokers conducted by United Trust Bank found that 28% believed the rate would increase in the second half of 2017, while an almost identical 27% expected it to come in the first six months of next year.

A further one-quarter of respondents suggested the BoE would wait until the latter half of 2018, while 18% predicted 2019 or beyond.

New commercial property platform to transform due diligence process

A new online platform dedicated to kick-start commercial property transactions has been launched.

Search Acumen’s online platform is designed to transform the due diligence process by providing real estate lawyers with instant access to commercial property data sets, giving them the ability to conduct

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Let’s Talk!

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

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COMMERCIAL FINANCE NEWS

and manage a portfolio of property searches in one place.

The property search provider claims the platform is the commercial market’s first integrated system which streamlines free access to data and information for lawyers carrying out due diligence on a transaction.

Scotland to launch fintech accelerator

Scotland’s first fintech accelerator is set to launch in Edinburgh.

The new hub – which is backed by the UK and Scottish governments – will be based in RBS’s Entrepreneurial Spark business centre in Gogarburn.

From May, fintech start-ups will be able to benefit from RBS’s tech expertise and networks, as well as help from Entrepreneurial Spark partners KPMG, Dell EMC and Harper Macleod.

Specialist lender raises £150m for SME fund

Specialist lender Beechbrook Capital has closed its first SME fund with commitments of over £150m.

The Beechbrook Capital UK SME Credit I fund backs SMEs in the UK with a turnover of between £10m and £100m as well as earnings before interest, tax, depreciation and amortisation of over £1m.

Beechbrook reported that the fund attracted investors from not only the UK, but from continental Europe and America.

The final close was supported by a combination of new and existing investors.

Fleximize launches business loan comparison tool

A new comparison tool to help SMEs receive a better deal

Together, powering UK businesses to grow With award winning service and over 30 years of expertise, Hitachi Capital Business Finance provides a flexible range of asset finance solutions – powering businesses of all sizes, across sectors and specialities.

Asset Finance Block Discounting Stocking Invoice Finance

To power your business call us today

01784 227322

hitachicapital.co.uk/business-finance

on their business finance has been launched by Fleximize.

The revenue-based finance provider’s comparison tool will allow businesses to instantly compare business loan quotes that are based on a range of different rates.

Fleximize has introduced the tool after finding that businesses were accepting quotes based on less conventional rate types – such as yield or factor rate – believing them to be cheaper than quotes based on a monthly interest rate.

Office-to-resi conversions fall 19%

Office-to-residential conversions dropped by almost one-fifth in 2015/16, new figures have revealed.

Data published by peer-topeer lending platform Saving Stream showed there were just 2,388 such conversions in the

year to 30th September 2016, down from 2,942 in 2014/15.

£400m fund launches for Northern SMEs

The British Business Bank has launched its £400m Northern Powerhouse Investment Fund aimed at boosting the North of England’s economy and helping the region’s businesses realise their growth potential.

The British Business Bank’s recent ‘Spotlight: The Northern Powerhouse Investment Fund’ publication reported that the North contributes £350bn per year in GDP – close to onefifth of the UK economy.

The new fund aims to build on this foundation by providing smaller businesses with increased choice of funding and producing greater levels of investment across the Northern Powerhouse region.

Yes. It’s never a maybe with our bridging finance decisions When we say yes, we mean yes Once we agree a bridging loan, assuming nothing changes, it’s set in concrete. Final, done, dusted. We won’t change our minds or try to re-negotiate. We’ll just get on with making the background process as quick and simple as possible, so you can get on with what you set out to do.

For more information about our bridging products please contact us on 020 7036 2000 or email enquiries@masthaven.co.uk

masthaven.co.uk Your property, provided as security for the loan, may be repossessed if you do not keep up with payments.

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).

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.

10 | NACFB Magazine

COMMERCIAL FINANCE NEWS

and manage a portfolio of property searches in one place.

The property search provider claims the platform is the commercial market’s first integrated system which streamlines free access to data and information for lawyers carrying out due diligence on a transaction.

Scotland to launch fintech accelerator

Scotland’s first fintech accelerator is set to launch in Edinburgh.

The new hub – which is backed by the UK and Scottish governments – will be based in RBS’s Entrepreneurial Spark business centre in Gogarburn.

From May, fintech start-ups will be able to benefit from RBS’s tech expertise and networks, as well as help from Entrepreneurial Spark partners KPMG, Dell EMC and Harper Macleod.

Specialist lender raises £150m for SME fund

Specialist lender Beechbrook Capital has closed its first SME fund with commitments of over £150m.

The Beechbrook Capital UK SME Credit I fund backs SMEs in the UK with a turnover of between £10m and £100m as well as earnings before interest, tax, depreciation and amortisation of over £1m.

Beechbrook reported that the fund attracted investors from not only the UK, but from continental Europe and America.

The final close was supported by a combination of new and existing investors.

Fleximize launches business loan comparison tool

A new comparison tool to help SMEs receive a better deal

Together, powering UK businesses to grow With award winning service and over 30 years of expertise, Hitachi Capital Business Finance provides a flexible range of asset finance solutions – powering businesses of all sizes, across sectors and specialities.

Asset Finance Block Discounting Stocking Invoice Finance

To power your business call us today

01784 227322

hitachicapital.co.uk/business-finance

on their business finance has been launched by Fleximize.

The revenue-based finance provider’s comparison tool will allow businesses to instantly compare business loan quotes that are based on a range of different rates.

Fleximize has introduced the tool after finding that businesses were accepting quotes based on less conventional rate types – such as yield or factor rate – believing them to be cheaper than quotes based on a monthly interest rate.

Office-to-resi conversions fall 19%

Office-to-residential conversions dropped by almost one-fifth in 2015/16, new figures have revealed.

Data published by peer-topeer lending platform Saving Stream showed there were just 2,388 such conversions in the

year to 30th September 2016, down from 2,942 in 2014/15.

£400m fund launches for Northern SMEs

The British Business Bank has launched its £400m Northern Powerhouse Investment Fund aimed at boosting the North of England’s economy and helping the region’s businesses realise their growth potential.

The British Business Bank’s recent ‘Spotlight: The Northern Powerhouse Investment Fund’ publication reported that the North contributes £350bn per year in GDP – close to onefifth of the UK economy.

The new fund aims to build on this foundation by providing smaller businesses with increased choice of funding and producing greater levels of investment across the Northern Powerhouse region.

Yes. It’s never a maybe with our bridging finance decisions When we say yes, we mean yes Once we agree a bridging loan, assuming nothing changes, it’s set in concrete. Final, done, dusted. We won’t change our minds or try to re-negotiate. We’ll just get on with making the background process as quick and simple as possible, so you can get on with what you set out to do.

For more information about our bridging products please contact us on 020 7036 2000 or email enquiries@masthaven.co.uk

masthaven.co.uk Your property, provided as security for the loan, may be repossessed if you do not keep up with payments.

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).

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.

10 | NACFB Magazine

Top | story

® Financial services

Our pick of the latest patron news

Development funding

Retention proc fees on the rise Specialist lender and savings bank Aldermore has announced the introduction of retention procuration (proc) fees – payable to its broker partners – beginning on 3rd April.

The 0.3% net proc fee is payable for completion of product transfers of existing customers on to one of the bank’s loyalty mortgages.

The fee is available on the full range of loyalty mortgages, including residential owner-occupied and standard buy-to-let customers.

Charles McDowell, commercial director at Aldermore, said: “Our proposition puts brokers at its heart. Brokers provide an indispensable service to their customers by giving them the right advice and ensuring the right customer outcome. I am delighted that we can give brokers the recognition they deserve by offering retention procuration fees.”

The news comes among a sudden rise in the number of large commercial lenders offering fees for retention business since the beginning of the year. Santander announced the introduction of a 0.2% retention fee from the beginning of March, with Nationwide and NatWest announcing plans to follow suit just a month later.

12 | NACFB Magazine

Spotlight on: Regulated Bridging Finance

Does your client need help to bridge the gap?

However, the rise in retention proc fees shows businesses are recognising the value that a finance broker brings to the deal – and rewarding them.

Vera Sugar Editor NACFB Magazine

HSBC said it will be reviewing its approach to proc fees paid on retention after becoming the sole major lender to not offer such payments.

Additionally, several smaller lenders and building societies made the headlines earlier in the year by announcing their intention to introduce retention proc fees, including Leeds Building Society and Skipton.

Accord Mortgages announced the extension of its pilot programme, launched in 2016, for retention proc fees on residential business only. David Robinson, national intermediary sales manager, emphasised the importance of intermediary work in the process: “We are committed to helping brokers build meaningful connections with their clients, and this involves recognising the effort they make to ensure borrowers get the right remortgage deal.”

Precise Mortgages announced its retention programme and procuration fees as early as July 2016.

The significance Retention proc fees have been under debate for some time. There was a renewed call on lenders last year after the Mortgage Credit Directive and Mortgage Market Review, from brokers claiming their workload had significantly increased while fees remained the same.

Mortgages Second charge

Graham Felstead, head of intermediary mortgages at NatWest, said: “The topic of retention fees has been one that has been high on brokers’ agendas for some time. We fully appreciate that brokers deserve a level of recompense to reflect the work that they have to do in helping their customers to get the most appropriate deals, including when that is to remain with their existing lender on a new deal. In coming to our decision, we took soundings from many of our business partners to ensure our proposed plans were in line with market expectations.”

With over 40 years’ experience in the specialist lending market, our expert team works in partnership with brokers to find the right solution for the client.

Is it enough?

Although the introduction of fees for retention business is a positive development for brokers nationwide, the question remains as to whether the average fee offered (around 0.2% of the newly introduced retention proc fees) will be stimulating enough to give retention business a significant boost.

As a Bridging specialist, we could help with:

The fees brokers can attain through the introduction of new business are currently still higher than that of a retention, and so it remains to be seen whether lenders will need to do more to encourage this type of service from brokers.

Another issue that has been brought to the foreground by recent headlines is whether paying retention proc fees would affect the quality of advice provided by brokers – as a product transfer may require less effort and research than recommending a remortgage.

However, with the help of associations such as the NACFB and the Council of Mortgage Lenders – who are working to uphold industry standards and quality of service – as well as working with industry-certified professionals, such as NACFB Members – borrowers can trust that the advice they receive will be in their best interest.

– either as a first and first charge or a first and second charge

Nick Jones National Sales Manager

property, inheritance and a combination of remortgage and sale

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

Top | story

® Financial services

Our pick of the latest patron news

Development funding

Retention proc fees on the rise Specialist lender and savings bank Aldermore has announced the introduction of retention procuration (proc) fees – payable to its broker partners – beginning on 3rd April.

The 0.3% net proc fee is payable for completion of product transfers of existing customers on to one of the bank’s loyalty mortgages.

The fee is available on the full range of loyalty mortgages, including residential owner-occupied and standard buy-to-let customers.

Charles McDowell, commercial director at Aldermore, said: “Our proposition puts brokers at its heart. Brokers provide an indispensable service to their customers by giving them the right advice and ensuring the right customer outcome. I am delighted that we can give brokers the recognition they deserve by offering retention procuration fees.”

The news comes among a sudden rise in the number of large commercial lenders offering fees for retention business since the beginning of the year. Santander announced the introduction of a 0.2% retention fee from the beginning of March, with Nationwide and NatWest announcing plans to follow suit just a month later.

12 | NACFB Magazine

Spotlight on: Regulated Bridging Finance

Does your client need help to bridge the gap?

However, the rise in retention proc fees shows businesses are recognising the value that a finance broker brings to the deal – and rewarding them.

Vera Sugar Editor NACFB Magazine

HSBC said it will be reviewing its approach to proc fees paid on retention after becoming the sole major lender to not offer such payments.

Additionally, several smaller lenders and building societies made the headlines earlier in the year by announcing their intention to introduce retention proc fees, including Leeds Building Society and Skipton.

Accord Mortgages announced the extension of its pilot programme, launched in 2016, for retention proc fees on residential business only. David Robinson, national intermediary sales manager, emphasised the importance of intermediary work in the process: “We are committed to helping brokers build meaningful connections with their clients, and this involves recognising the effort they make to ensure borrowers get the right remortgage deal.”

Precise Mortgages announced its retention programme and procuration fees as early as July 2016.

The significance Retention proc fees have been under debate for some time. There was a renewed call on lenders last year after the Mortgage Credit Directive and Mortgage Market Review, from brokers claiming their workload had significantly increased while fees remained the same.

Mortgages Second charge

Graham Felstead, head of intermediary mortgages at NatWest, said: “The topic of retention fees has been one that has been high on brokers’ agendas for some time. We fully appreciate that brokers deserve a level of recompense to reflect the work that they have to do in helping their customers to get the most appropriate deals, including when that is to remain with their existing lender on a new deal. In coming to our decision, we took soundings from many of our business partners to ensure our proposed plans were in line with market expectations.”

With over 40 years’ experience in the specialist lending market, our expert team works in partnership with brokers to find the right solution for the client.

Is it enough?

Although the introduction of fees for retention business is a positive development for brokers nationwide, the question remains as to whether the average fee offered (around 0.2% of the newly introduced retention proc fees) will be stimulating enough to give retention business a significant boost.

As a Bridging specialist, we could help with:

The fees brokers can attain through the introduction of new business are currently still higher than that of a retention, and so it remains to be seen whether lenders will need to do more to encourage this type of service from brokers.

Another issue that has been brought to the foreground by recent headlines is whether paying retention proc fees would affect the quality of advice provided by brokers – as a product transfer may require less effort and research than recommending a remortgage.

However, with the help of associations such as the NACFB and the Council of Mortgage Lenders – who are working to uphold industry standards and quality of service – as well as working with industry-certified professionals, such as NACFB Members – borrowers can trust that the advice they receive will be in their best interest.

– either as a first and first charge or a first and second charge

Nick Jones National Sales Manager

property, inheritance and a combination of remortgage and sale

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

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

Unlocking billions of pounds from the portfolios of UK property professionals Recent research by the lender Just Cash Flow PLC revealed that £70bn has been added to buy-to-let equity over the last two years while house prices have risen 15% nationally. The research showed property professionals are equity rich but options poor. This is because prior to the financial crisis many had the foresight to take out tracker mortgages around just 0.5% to 1% above Base Rate.

Octopus Property launches major product overhaul Alex Lynn Reporter Bridging & Commercial

Octopus Property has embarked on a comprehensive revamp of its entire lending suite for 2017.

In February, the lender revealed that it had cut rates across all major LTV bandings on its residential bridging loan range, offering rates as low as 0.6% with an LTV of up to 50%.

This was followed by news that Octopus had also slashed interest on its refurbishment loan product.

“The specialist lending sector has evolved beyond recognition over the past eight years and we felt it was time to evolve our own proposition fundamentally in order to continue to provide a best-inclass offering,” explained Mario Berti, CEO of Octopus Property.

“The overhaul of our product range that we have started, and

which will continue throughout 2017, is the most significant since we launched back in 2009.

“With the market-leading bridging and refurbishment rates announced so far, we hope to have sent a clear message to the broker community that we are open for business and want to be their first port of call.”

The existing changes will be followed by updates to Octopus’ buy-to-let, commercial and development finance offerings.

Earlier this year, Octopus Property reported a significant uplift in agreements in principle for its twoto five-year buy-to-let products during the final quarter of 2016.

This surge came despite a series of blows to landlords, including new minimum underwriting standards as introduced by the PRA and changes to tax relief for mortgage interest payments.

Though only two product ranges have been refreshed thus far, Mario revealed the company’s revised products had also proven to be a hit with intermediaries.

“Demand for our new bridging and refurbishment products has been far stronger than we’d anticipated.

“The initial signs are highly encouraging, but we expect take-up rates to improve even more as we update the rest of our product range.”

Octopus Property is not the only lender to have reduced rates across certain ranges.

In January, Precise Mortgages introduced a new bridging product at its lowest-ever rate.

Similarly, Masthaven Bank dropped rates on its first charge bridging products for selected brokers.

Despite this, Mario hoped Octopus’ decision to revamp its entire range would help the lender to stand out from the crowd.

“This is a qualitative as much as a quantitative makeover and is about being fast, flexible and deeply professional in the service we provide.

“Our plan is to offer an endto-end proposition that is unrivalled in the industry.”

And with further improvements planned for the weeks and months ahead, Octopus appears to be just getting started.

“We can’t reveal our hand at this stage, but let’s just say the best is yet to come.”

Understandably the last thing they want to do now is unlock the equity in their portfolios by remortgaging as this would increase their overall borrowing costs. This can be extremely frustrating for property professionals as they are unable to use their equity to take on additional properties or improve their housing stock.

For this reason, Just Cashflow developed a flexible solution to support property professionals with funding from £10,000 to £500,000. Especially for established UK property businesses that own at least one commercial property, including buy-to-

lets, the solution operates in one of two ways: -

As a replica of a normal bridging loan where much larger funding is required for a new purchase.

In a similar way to a bank overdraft to help flatten out cash flow issues such as late rental payments, or flexible funding to carry out repairs and improvements as required.

As Just Cashflow is a business lender and not a property lender, due diligence is based on how the business is being managed and who is managing it. This results in potential access to loans at significantly higher LTV’s if security is taken over real assets, although this is only part of the lender’s consideration when underwriting a case.

Here is how Positive Commercial Finance worked with Just Cashflow to provide a fast, flexible solution for one of their client’s - a professional landlord. The client, who was operating through a limited company, planned to purchase a property at auction and to get planning permission to convert the property into two flats with the intention of letting them out.

Samantha Williamson of Positive Commercial Finance said: “The whole process was very slick, with email and telephone updates at every stage of my client’s application. And commission payments were received within just a few days of completion”. She also commented that her client was extremely happy with the outcome.

The speed and flexibility of the Just Cashflow Revolving Cash Fund really does set them apart and gives us confidence that they can help property professionals unlock value in their portfolios. *Positive Commercial Finance specialises in finding the best financing solutions for its clients and their businesses. They are a Full Member of the NACFB and an Associate Member of the Association of Bridging Professionals.

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 Cash Fund 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 14 | NACFB Magazine

Just Cashflow developed a solution for Positive Commercial Finance and their client that involved securing a two stage solution of 100% funding for the purchase price, followed by 100% funding for the conversion work which was released once the planning consent was in place. The funding was secured by way of a first charge on the property purchased, plus a second charge on another investment property owned. Once the works were completed and the flat let, the client refinanced with a standard buy-to-let mortgage at 75% of market value, enabling them to release some funds for his next project.

Trade Finance Excellence Awards

2017

TradeFinance.Global

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

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

Unlocking billions of pounds from the portfolios of UK property professionals Recent research by the lender Just Cash Flow PLC revealed that £70bn has been added to buy-to-let equity over the last two years while house prices have risen 15% nationally. The research showed property professionals are equity rich but options poor. This is because prior to the financial crisis many had the foresight to take out tracker mortgages around just 0.5% to 1% above Base Rate.

Octopus Property launches major product overhaul Alex Lynn Reporter Bridging & Commercial

Octopus Property has embarked on a comprehensive revamp of its entire lending suite for 2017.

In February, the lender revealed that it had cut rates across all major LTV bandings on its residential bridging loan range, offering rates as low as 0.6% with an LTV of up to 50%.

This was followed by news that Octopus had also slashed interest on its refurbishment loan product.

“The specialist lending sector has evolved beyond recognition over the past eight years and we felt it was time to evolve our own proposition fundamentally in order to continue to provide a best-inclass offering,” explained Mario Berti, CEO of Octopus Property.

“The overhaul of our product range that we have started, and

which will continue throughout 2017, is the most significant since we launched back in 2009.

“With the market-leading bridging and refurbishment rates announced so far, we hope to have sent a clear message to the broker community that we are open for business and want to be their first port of call.”

The existing changes will be followed by updates to Octopus’ buy-to-let, commercial and development finance offerings.

Earlier this year, Octopus Property reported a significant uplift in agreements in principle for its twoto five-year buy-to-let products during the final quarter of 2016.

This surge came despite a series of blows to landlords, including new minimum underwriting standards as introduced by the PRA and changes to tax relief for mortgage interest payments.

Though only two product ranges have been refreshed thus far, Mario revealed the company’s revised products had also proven to be a hit with intermediaries.

“Demand for our new bridging and refurbishment products has been far stronger than we’d anticipated.

“The initial signs are highly encouraging, but we expect take-up rates to improve even more as we update the rest of our product range.”

Octopus Property is not the only lender to have reduced rates across certain ranges.

In January, Precise Mortgages introduced a new bridging product at its lowest-ever rate.

Similarly, Masthaven Bank dropped rates on its first charge bridging products for selected brokers.

Despite this, Mario hoped Octopus’ decision to revamp its entire range would help the lender to stand out from the crowd.

“This is a qualitative as much as a quantitative makeover and is about being fast, flexible and deeply professional in the service we provide.

“Our plan is to offer an endto-end proposition that is unrivalled in the industry.”

And with further improvements planned for the weeks and months ahead, Octopus appears to be just getting started.

“We can’t reveal our hand at this stage, but let’s just say the best is yet to come.”

Understandably the last thing they want to do now is unlock the equity in their portfolios by remortgaging as this would increase their overall borrowing costs. This can be extremely frustrating for property professionals as they are unable to use their equity to take on additional properties or improve their housing stock.

For this reason, Just Cashflow developed a flexible solution to support property professionals with funding from £10,000 to £500,000. Especially for established UK property businesses that own at least one commercial property, including buy-to-

lets, the solution operates in one of two ways: -

As a replica of a normal bridging loan where much larger funding is required for a new purchase.

In a similar way to a bank overdraft to help flatten out cash flow issues such as late rental payments, or flexible funding to carry out repairs and improvements as required.

As Just Cashflow is a business lender and not a property lender, due diligence is based on how the business is being managed and who is managing it. This results in potential access to loans at significantly higher LTV’s if security is taken over real assets, although this is only part of the lender’s consideration when underwriting a case.

Here is how Positive Commercial Finance worked with Just Cashflow to provide a fast, flexible solution for one of their client’s - a professional landlord. The client, who was operating through a limited company, planned to purchase a property at auction and to get planning permission to convert the property into two flats with the intention of letting them out.

Samantha Williamson of Positive Commercial Finance said: “The whole process was very slick, with email and telephone updates at every stage of my client’s application. And commission payments were received within just a few days of completion”. She also commented that her client was extremely happy with the outcome.

The speed and flexibility of the Just Cashflow Revolving Cash Fund really does set them apart and gives us confidence that they can help property professionals unlock value in their portfolios. *Positive Commercial Finance specialises in finding the best financing solutions for its clients and their businesses. They are a Full Member of the NACFB and an Associate Member of the Association of Bridging Professionals.

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 Cash Fund 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 14 | NACFB Magazine

Just Cashflow developed a solution for Positive Commercial Finance and their client that involved securing a two stage solution of 100% funding for the purchase price, followed by 100% funding for the conversion work which was released once the planning consent was in place. The funding was secured by way of a first charge on the property purchased, plus a second charge on another investment property owned. Once the works were completed and the flat let, the client refinanced with a standard buy-to-let mortgage at 75% of market value, enabling them to release some funds for his next project.

Trade Finance Excellence Awards

2017

TradeFinance.Global

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

Case Studies Completion highlights from a selection of our Patrons and Members

D&D’s cross-border finance deal Rev. Dr. K. Bill Dost Managing director D&D Leasing D&D Leasing, founded in Canada in 2000, has predominantly been known as a sub-prime lease and loan funder with a very specific appetite. However, over the years we have worked with the full range of small businesses in all sectors as the business expanded.

We’ve been around collectively for almost 17 years and in that time, while we have expanded our offerings significantly from where we started, most customers got to feel like they know us.

However, with Productivity Media, the case wasn’t so straightforward.

In this instance, they had a very compelling need – a loan with a unique flavour to it that most funders could not get their heads around.

An international challenge Productivity was founded in Canada and had expanded into the UK due to growing business concerns, just like D&D Leasing had. Like many companies based abroad, it had run into some of the more difficult parts of the UK financial system when addressing the need to raise credit, especially when it came to Productivity’s line of work: the film industry.

Film finance has had its day in the UK and, for many, its time has come and gone. Thankfully, D&D Leasing wasn’t affected by history.

Productivity approached us with an interesting challenge. They needed a loan to back a film in production at the time of the enquiry; their fund was the last piece required to finance the film. There was very little by way of tangible assets that could be pledged or secured against, and the funding

16 | NACFB Magazine

request was made by Productivity’s UK subsidiary, who informed us the funds would be moved thereafter to the parent company and distributed.

A unique challenge by all accounts and one that – we learnt – was declined by other sources. We were told that, due to how payments would be made, the structure needed to stay in place as suggested.

Finding a way We looked at the history of Productivity and saw that it had previously funded a number of films and that while its UK entity was weaker, its Canadian entity had strength. From a D&D perspective we saw the deal was short-term and the client’s proposed timelines made sense. We were thus able to paper the transaction in both jurisdictions (Canada and the UK). We also ensured that, upon completion, we were the first ones to be repaid prior to any of the other parties involved with the transaction. With the client’s agreement, the transaction was papered and completed, and we’ve completed a number of other transactions with this particular client since then.

ACHIEVE YOUR DREAMS.

due to two factors: first, because the multi-country approach and complicated nature of the transaction didn’t scare the company; and second, because we ourselves were a multi-country organisation.

Working with SMEs in all sectors, we have come to believe that they are the backbone of the economy and as their businesses grow, they grow businesses all around them. We were created to serve the entrepreneurial segment of the small- and medium-sized business sector. If a loan is required to fund VAT, PPI, WIP or even to buy out a partner, chances are we can look at the transaction and find a way to fulfil the request in a timely fashion.

Short term finance, long term benefits.

Loans from £30,000 to £1,000,000.

1st & 2nd charge Bridging loans.

Up to 70% LTV. Rates from as little as 1% pcm.*

w: www.kuflink.co.uk | t: 01474 33 44 88

D&D Leasing was able to find a way to make this transaction work mainly This advert is for intermediary use only and not intended for consumers.

Kuflink Bridging Ltd is fully authorised and regulated by the Financial Conduct Authority (723495).

Your property may be repossessed if you do not keep up with repayments. *Rate subject to underwriting criteria.

Case Studies Completion highlights from a selection of our Patrons and Members

D&D’s cross-border finance deal Rev. Dr. K. Bill Dost Managing director D&D Leasing D&D Leasing, founded in Canada in 2000, has predominantly been known as a sub-prime lease and loan funder with a very specific appetite. However, over the years we have worked with the full range of small businesses in all sectors as the business expanded.

We’ve been around collectively for almost 17 years and in that time, while we have expanded our offerings significantly from where we started, most customers got to feel like they know us.

However, with Productivity Media, the case wasn’t so straightforward.

In this instance, they had a very compelling need – a loan with a unique flavour to it that most funders could not get their heads around.

An international challenge Productivity was founded in Canada and had expanded into the UK due to growing business concerns, just like D&D Leasing had. Like many companies based abroad, it had run into some of the more difficult parts of the UK financial system when addressing the need to raise credit, especially when it came to Productivity’s line of work: the film industry.

Film finance has had its day in the UK and, for many, its time has come and gone. Thankfully, D&D Leasing wasn’t affected by history.

Productivity approached us with an interesting challenge. They needed a loan to back a film in production at the time of the enquiry; their fund was the last piece required to finance the film. There was very little by way of tangible assets that could be pledged or secured against, and the funding

16 | NACFB Magazine

request was made by Productivity’s UK subsidiary, who informed us the funds would be moved thereafter to the parent company and distributed.

A unique challenge by all accounts and one that – we learnt – was declined by other sources. We were told that, due to how payments would be made, the structure needed to stay in place as suggested.

Finding a way We looked at the history of Productivity and saw that it had previously funded a number of films and that while its UK entity was weaker, its Canadian entity had strength. From a D&D perspective we saw the deal was short-term and the client’s proposed timelines made sense. We were thus able to paper the transaction in both jurisdictions (Canada and the UK). We also ensured that, upon completion, we were the first ones to be repaid prior to any of the other parties involved with the transaction. With the client’s agreement, the transaction was papered and completed, and we’ve completed a number of other transactions with this particular client since then.

ACHIEVE YOUR DREAMS.

due to two factors: first, because the multi-country approach and complicated nature of the transaction didn’t scare the company; and second, because we ourselves were a multi-country organisation.

Working with SMEs in all sectors, we have come to believe that they are the backbone of the economy and as their businesses grow, they grow businesses all around them. We were created to serve the entrepreneurial segment of the small- and medium-sized business sector. If a loan is required to fund VAT, PPI, WIP or even to buy out a partner, chances are we can look at the transaction and find a way to fulfil the request in a timely fashion.

Short term finance, long term benefits.

Loans from £30,000 to £1,000,000.

1st & 2nd charge Bridging loans.

Up to 70% LTV. Rates from as little as 1% pcm.*

w: www.kuflink.co.uk | t: 01474 33 44 88

D&D Leasing was able to find a way to make this transaction work mainly This advert is for intermediary use only and not intended for consumers.

Kuflink Bridging Ltd is fully authorised and regulated by the Financial Conduct Authority (723495).

Your property may be repossessed if you do not keep up with repayments. *Rate subject to underwriting criteria.

CASE STUDIES

Beyond the bank Tomer Aboody Director MTF Business statistics from UK parliament revealed that in 2016 there were 5.5 million private sector businesses in the UK – up 97,000 since 2015.

A need for fast, reliable and transparent liquidity to help service these businesses in the UK is as critical as ever. However, many businesses are still in the dark about the full range of funding options on offer to them.

According to a report published by Close Brothers Group, nearly half (46%) of SMEs have experienced barriers in accessing finance. The report highlights how this poses a significant challenge to the SME sector, especially as a large number (38%) of SMEs only turn to high street banks for information and advice on suitable types of finance.

When quick action is key Bridging loans have become a critical tool for funding the SME community in the last decade or so. The biggest selling points of bridging finance are still the speed and flexibility the product can offer, compared to mainstream lending.

As an example, MTF was approached by applicants looking to raise £550,000 to purchase their business premises from where they have been operating for a number of years. The clients had been offered to buy the premises by the vendor, but needed to act very quickly in order to take advantage of the opportunity.

With only three weeks in which to complete the purchase, MTF was approached after it turned out the client’s mortgage provider was unable to complete the deal within the tight timescale.

Down-to-earth approach To reach the agreed purchase price and maintain a sensible LTV threshold, an additional, residential asset was offered. Being a non-status lender enabled us to take a practical, commonsense approach to lending.

We placed a first charge bridging loan on the client’s commercial asset, and a second charge bridging loan over their residential asset.

In order for the client not to miss out on the opportunity, the valuations were instructed immediately and turned around by our surveyors very quickly, while our solicitors worked tirelessly to complete by the client’s deadline.

In just two weeks, MTF provided a £649,000 bridging loan at 60% LTV on

open market value. The clients opted for a 12-month term with no exit fees or early redemption penalty.

By taking out a bridging loan, the clients had the funds in plenty of time to complete the purchase of the premises they did not wish to lose.

They will repay the bridging loan from the sale of their residential property, which is already on the market.

The most versatile finance option There is an array of instances where bridging finance is the ideal solution for SMEs needing quick access to funds or to plug a gap that traditional lenders are unable to fill. Whether funds are needed to acquire stock, to facilitate a new venture or to provide additional capital to stimulate growth, bridging finance can often be the right solution due to its versatility.

At MTF, we believe a bridging loan should either make or save a borrower money. We welcome second charge applications and are actively looking to provide liquidity to the SME sector.

WORKING TOGETHER TO BUILD YOUR BUSINESS Asset Advantage is an award winning, privately owned, finance business specialising in providing asset finance and loans to SME businesses throughout the UK via a premium panel of introducers.

Our finance products utilise a combination of experience, expertise and uncompromising business processes to deliver the perfect solution to our clients.

To find out more about joining our select panel of introducers and our award winning SME finance solutions please call Tracy Millsom on:

01256 316 200 or visit our website on:

www.assetadvantage.co.uk Efficient Finance is our Advantage Third Floor, Matrix House, Basing View, Basingstoke, Hampshire, RG21 4DZ

18 | NACFB Magazine

CASE STUDIES

Beyond the bank Tomer Aboody Director MTF Business statistics from UK parliament revealed that in 2016 there were 5.5 million private sector businesses in the UK – up 97,000 since 2015.

A need for fast, reliable and transparent liquidity to help service these businesses in the UK is as critical as ever. However, many businesses are still in the dark about the full range of funding options on offer to them.

According to a report published by Close Brothers Group, nearly half (46%) of SMEs have experienced barriers in accessing finance. The report highlights how this poses a significant challenge to the SME sector, especially as a large number (38%) of SMEs only turn to high street banks for information and advice on suitable types of finance.

When quick action is key Bridging loans have become a critical tool for funding the SME community in the last decade or so. The biggest selling points of bridging finance are still the speed and flexibility the product can offer, compared to mainstream lending.

As an example, MTF was approached by applicants looking to raise £550,000 to purchase their business premises from where they have been operating for a number of years. The clients had been offered to buy the premises by the vendor, but needed to act very quickly in order to take advantage of the opportunity.

With only three weeks in which to complete the purchase, MTF was approached after it turned out the client’s mortgage provider was unable to complete the deal within the tight timescale.

Down-to-earth approach To reach the agreed purchase price and maintain a sensible LTV threshold, an additional, residential asset was offered. Being a non-status lender enabled us to take a practical, commonsense approach to lending.

We placed a first charge bridging loan on the client’s commercial asset, and a second charge bridging loan over their residential asset.

In order for the client not to miss out on the opportunity, the valuations were instructed immediately and turned around by our surveyors very quickly, while our solicitors worked tirelessly to complete by the client’s deadline.

In just two weeks, MTF provided a £649,000 bridging loan at 60% LTV on

open market value. The clients opted for a 12-month term with no exit fees or early redemption penalty.

By taking out a bridging loan, the clients had the funds in plenty of time to complete the purchase of the premises they did not wish to lose.

They will repay the bridging loan from the sale of their residential property, which is already on the market.

The most versatile finance option There is an array of instances where bridging finance is the ideal solution for SMEs needing quick access to funds or to plug a gap that traditional lenders are unable to fill. Whether funds are needed to acquire stock, to facilitate a new venture or to provide additional capital to stimulate growth, bridging finance can often be the right solution due to its versatility.

At MTF, we believe a bridging loan should either make or save a borrower money. We welcome second charge applications and are actively looking to provide liquidity to the SME sector.

WORKING TOGETHER TO BUILD YOUR BUSINESS Asset Advantage is an award winning, privately owned, finance business specialising in providing asset finance and loans to SME businesses throughout the UK via a premium panel of introducers.

Our finance products utilise a combination of experience, expertise and uncompromising business processes to deliver the perfect solution to our clients.

To find out more about joining our select panel of introducers and our award winning SME finance solutions please call Tracy Millsom on:

01256 316 200 or visit our website on:

www.assetadvantage.co.uk Efficient Finance is our Advantage Third Floor, Matrix House, Basing View, Basingstoke, Hampshire, RG21 4DZ

18 | NACFB Magazine

CASE STUDIES

Helping smaller developers achieve better margins Paul Fitzsimmons Relationship manager Seneca Bridging

We met the developer on the site, explored various options and undertook scenario planning around alternative outlooks for the housing market. We agreed the optimal solution was to demolish the existing property and replace it with two two-bedroom apartments, finished to a high standard, each benefiting from two parking spaces – a scarce resource for first-time buyers in this busy area.

Seneca Bridging has launched a small development loan service that reflects the innovative approach to SME financing within the Seneca family.

Such an approach recently saw its sister company Seneca Partners recognised as the Alternative Finance Provider of the Year at the Insider North West Dealmakers Awards 2016.

Catering for the right buyers In one recent case, a finance consultant introduced us to an experienced builder who had identified a development opportunity in Hertfordshire. Initially, planning was achieved for a refurbishment and modification of the existing property, but this would have restricted the developer to a 15% profit margin.

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

Seneca agreed to lend £130,000 to assist with the purchase of the property, which equated to about 50% of its purchase price. We are providing 100% of the £195,000 build costs to the developer and we’ll finance the build on a phased basis, so the developer is only paying interest on money when he absolutely needs it. The gross development value uplift has ensured the developer has increased his margin to 26%.

Every development finance enquiry requires introducers and lenders to undertake what can amount to a significant amount of work on behalf of their clients. Through our conversations with introducers, we recognised that many lenders were not providing 100% of build cost funding to smaller projects because of the perceived lack of reward for effort involved. Developers looking to build one to five units, therefore, lack the funding options from an industry that often focuses on bigger projects.

Seneca Bridging has designed a service that allows introducers to refer their small housebuilding clients to us with minimal subsequent involvement from the introducer. We meet the developer and – drawing on many years of construction analysis and property funding experience – the team explores development solutions that minimise cost and maximise sales and rental values.

We undertook a survey of the local area and discovered there was great demand for properties for first-time buyers. The site benefited from proximity to local employment hotspots and was walking distance from an overground station served by fast trains to London. However, it lacks easy access to amenities for young families, such as schools or play parks.

The site is, therefore, ideal for young professionals looking to gain a footing on the property ladder.

... We recognised that many lenders were not providing 100% of build cost funding to smaller projects because of the perceived lack of reward for effort involved

Assisting small developers We know our small residential developers are particularly sensitive to costs – often they haven’t budgeted for professional services, such as a monitoring quantity surveyor or indeed the lender’s legal costs. We explore their cost plan in the initial stages of a loan enquiry and ensure their budgets and risk forecasts are as accurate as possible. We only use lawyers and surveyors who share our ethos of delivering at pace and with value, so as to further maximise developers’ profit margins.

The developer has already approached us – via their original introducer – with their next opportunity, and we look forward to continuing to fund their projects for years to come.

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.

20 | NACFB Magazine

CASE STUDIES

Helping smaller developers achieve better margins Paul Fitzsimmons Relationship manager Seneca Bridging

We met the developer on the site, explored various options and undertook scenario planning around alternative outlooks for the housing market. We agreed the optimal solution was to demolish the existing property and replace it with two two-bedroom apartments, finished to a high standard, each benefiting from two parking spaces – a scarce resource for first-time buyers in this busy area.

Seneca Bridging has launched a small development loan service that reflects the innovative approach to SME financing within the Seneca family.

Such an approach recently saw its sister company Seneca Partners recognised as the Alternative Finance Provider of the Year at the Insider North West Dealmakers Awards 2016.

Catering for the right buyers In one recent case, a finance consultant introduced us to an experienced builder who had identified a development opportunity in Hertfordshire. Initially, planning was achieved for a refurbishment and modification of the existing property, but this would have restricted the developer to a 15% profit margin.

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

Seneca agreed to lend £130,000 to assist with the purchase of the property, which equated to about 50% of its purchase price. We are providing 100% of the £195,000 build costs to the developer and we’ll finance the build on a phased basis, so the developer is only paying interest on money when he absolutely needs it. The gross development value uplift has ensured the developer has increased his margin to 26%.

Every development finance enquiry requires introducers and lenders to undertake what can amount to a significant amount of work on behalf of their clients. Through our conversations with introducers, we recognised that many lenders were not providing 100% of build cost funding to smaller projects because of the perceived lack of reward for effort involved. Developers looking to build one to five units, therefore, lack the funding options from an industry that often focuses on bigger projects.

Seneca Bridging has designed a service that allows introducers to refer their small housebuilding clients to us with minimal subsequent involvement from the introducer. We meet the developer and – drawing on many years of construction analysis and property funding experience – the team explores development solutions that minimise cost and maximise sales and rental values.

We undertook a survey of the local area and discovered there was great demand for properties for first-time buyers. The site benefited from proximity to local employment hotspots and was walking distance from an overground station served by fast trains to London. However, it lacks easy access to amenities for young families, such as schools or play parks.

The site is, therefore, ideal for young professionals looking to gain a footing on the property ladder.

... We recognised that many lenders were not providing 100% of build cost funding to smaller projects because of the perceived lack of reward for effort involved

Assisting small developers We know our small residential developers are particularly sensitive to costs – often they haven’t budgeted for professional services, such as a monitoring quantity surveyor or indeed the lender’s legal costs. We explore their cost plan in the initial stages of a loan enquiry and ensure their budgets and risk forecasts are as accurate as possible. We only use lawyers and surveyors who share our ethos of delivering at pace and with value, so as to further maximise developers’ profit margins.

The developer has already approached us – via their original introducer – with their next opportunity, and we look forward to continuing to fund their projects for years to come.

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.

20 | NACFB Magazine

CASE STUDIES

11 minutes can make all the difference Richard Waldman Group sales director Ultimate Finance

At Ultimate Finance, part of the Tavistock Group, we’ve always worked hard to give businesses access to funding both quickly and efficiently to ensure they continue to thrive in what feels like a good time for the UK economy.

To deliver on this mission, we set ourselves two major goals: to have impressive levels of customer service and to develop a range of products that are as useful as they can possibly be in the real world of business.

In order to tick the first of these two boxes, we invested heavily in finding the right staff for our team and recruited colleagues who not only are experts in what they do, but also provide the kind of friendly, personal voice that’s often missing when dealing with large financial institutions.

To fulfil the second part of our mission, we spent a huge amount of time talking to business owners to find out what kind of financial support was needed. From these discussions, it became clear that although there

22 | NACFB Magazine

were dozens of different options available to a business looking for a cash injection, many were hampered by slow response times and delays in actually getting money into business bank accounts.

Enter Ultimate Finance’s cash advance product. This is something that we’re all very excited about, not just because we believe it’s the fastest pre-approved loan of its kind on the market, with the whole process being as quick as 11 minutes and 16 seconds, but also because it’s meeting a very real business need.

Funding under the weather One early customer was Steve Jones whose company, Edspace Ltd, provides all-weather running tracks for schools to use in conjunction with the Daily Mile initiative. The business has been very successful and as a result, it has expanded quickly. But, as Steve explains, without the right funding, expansion can be challenging.

“Funding the expansion is our main problem. Especially during school holidays as our customers are not available to process our invoices.

Recently, we were waiting for £21,000 to arrive from two schools after completing our work for them.”

An interruption in cash flow like this can then have a knock-on effect on

future work. Steve continues: “We could not fund the material costs for the installs we had booked for the following week. I spoke to my bank who said that they would be happy to provide an overdraft but it would take two to three weeks to put in place.

“After a sleepless night I discovered the Ultimate Finance website, applied for a cash advance and within 45 minutes it was in my account.”

Simple as can be As Steve discovered, the application process is as simple as we could make it and, from start to finish, a business can have up to £50,000 in its account in as little as just over 11 minutes. We’ve also kept payments as simple as possible with a single repayment in either 30, 60 or 90 days and no early repayment fees.

We know that for business owners, the less time they can spend worrying about cash flow, the more time they can dedicate to doing what they love: running their business to best serve the needs of their customers.

CASE STUDIES

11 minutes can make all the difference Richard Waldman Group sales director Ultimate Finance

At Ultimate Finance, part of the Tavistock Group, we’ve always worked hard to give businesses access to funding both quickly and efficiently to ensure they continue to thrive in what feels like a good time for the UK economy.

To deliver on this mission, we set ourselves two major goals: to have impressive levels of customer service and to develop a range of products that are as useful as they can possibly be in the real world of business.

In order to tick the first of these two boxes, we invested heavily in finding the right staff for our team and recruited colleagues who not only are experts in what they do, but also provide the kind of friendly, personal voice that’s often missing when dealing with large financial institutions.

To fulfil the second part of our mission, we spent a huge amount of time talking to business owners to find out what kind of financial support was needed. From these discussions, it became clear that although there

22 | NACFB Magazine

were dozens of different options available to a business looking for a cash injection, many were hampered by slow response times and delays in actually getting money into business bank accounts.

Enter Ultimate Finance’s cash advance product. This is something that we’re all very excited about, not just because we believe it’s the fastest pre-approved loan of its kind on the market, with the whole process being as quick as 11 minutes and 16 seconds, but also because it’s meeting a very real business need.

Funding under the weather One early customer was Steve Jones whose company, Edspace Ltd, provides all-weather running tracks for schools to use in conjunction with the Daily Mile initiative. The business has been very successful and as a result, it has expanded quickly. But, as Steve explains, without the right funding, expansion can be challenging.

“Funding the expansion is our main problem. Especially during school holidays as our customers are not available to process our invoices.

Recently, we were waiting for £21,000 to arrive from two schools after completing our work for them.”

An interruption in cash flow like this can then have a knock-on effect on

future work. Steve continues: “We could not fund the material costs for the installs we had booked for the following week. I spoke to my bank who said that they would be happy to provide an overdraft but it would take two to three weeks to put in place.

“After a sleepless night I discovered the Ultimate Finance website, applied for a cash advance and within 45 minutes it was in my account.”

Simple as can be As Steve discovered, the application process is as simple as we could make it and, from start to finish, a business can have up to £50,000 in its account in as little as just over 11 minutes. We’ve also kept payments as simple as possible with a single repayment in either 30, 60 or 90 days and no early repayment fees.

We know that for business owners, the less time they can spend worrying about cash flow, the more time they can dedicate to doing what they love: running their business to best serve the needs of their customers.

Cover Story | feature

Spring Budget 2017: An olive branch reform for small businesses?

On 8th March, chancellor of the exchequer Philip Hammond delivered his first spring Budget in which he announced a ÂŁ435m relief package for small businesses affected by the business rates revaluation.

Cover Story | feature

Spring Budget 2017: An olive branch reform for small businesses?

On 8th March, chancellor of the exchequer Philip Hammond delivered his first spring Budget in which he announced a ÂŁ435m relief package for small businesses affected by the business rates revaluation.

COVER STORY

COVER STORY

The government is now also looking at a better way of taxing the digital part of the economy.

Mr Hammond said: “…There is scope to reform the revaluation process, making it smoother and more frequent, to avoid the dramatic increases that the present system can deliver.

“We will set out our preferred approach in due course and will consult on it before the next revaluation is due.” £1,000 discount on business rates bills for 90% of all UK pubs

Industry reactions Charlotte Rutter, head of marketing at TFC Homeloans, said that Mr Hammond had saved many businesses from going under. “…This pragmatic thinking and the £50 a month cap should be welcomed.

“It will be interesting to see which local authorities will benefit most from the discretionary relief fund, but the bigger picture is that this is a sensible move to keep Britain’s nation of shopkeepers in business.”

Philip Hammond, chancellor of the exchequer

Beth Fisher Editor Bridging & Commercial

Revaluations usually happen every five years, whereby the Valuation Office Agency (VOA) adjusts the rateable value of business properties to reflect changes in the property market.

26 | NACFB Magazine

If a business’s property in England has a rateable value under £18,000 (£25,500 in Greater London) it is considered a small business. If a business does not qualify for small business rate relief, its bill will be calculated using the small business multiplier, which is lower than the standard multiplier.

Since the revaluation came into effect on 1st April, businesses pay the small business multiplier if their property has a rateable value below £51,000.

During the Budget announcement, Mr Hammond explained that the revaluation had raised some hard cases, especially for businesses coming out of small business relief.

Addressing those concerns, Mr Hammond revealed three measures resulting in a further £435m cut in business rates, targeted at small businesses facing the largest increases.

What is included in the £435m business rates relief package?

Businesses coming out of small business rate relief will benefit from an additional cap. Next year, bills for businesses losing the relief won’t increase by more than £50 a month, and subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher A £1,000 discount on business rates bills in 2017 for all pubs with a rateable value of less than £100,000 – 90% of all UK pubs A £300m fund for local authorities to deliver discretionary relief for individual hard cases in their areas

Aamar Aslam, CEO of invoice trading platform Funding Invoice, said that the £300m fund for local authorities would undoubtedly be welcome news.

However, he explained that while a number of SMEs were relocating outside of the big cities as a result of rising commercial rents, they would still face business rate burdens.

“While this £300m fund is a step in the right direction, small businesses are continuing to suffer from cash flow imbalances outside of their control, and require support from government to resolve these issues and keep the economy afloat.”

Nik Moore, senior associate at commercial property and planning consultancy Rapleys, added that this uncertainty would be extended while the government consults on a proper approach to the policy.

“With businesses’ calls for radical rates reform reaching fever pitch, many will be disheartened, if not distressed, that yet

again, a viable long-term solution to the rates conundrum has been kicked into the long grass.

James Souter, partner at Charles Russell Speechlys, said that the Budget provided little comfort for the property industry.

“The stop gap measures the chancellor hopes will keep businesses at bay are of course welcome in principle. Pubs up and down the country have felt the squeeze recently and the £1,000 discount for around 90% of operators will be a real help.

“Looking at the detail, the chancellor’s overall ‘cuts’ actually amount to less than 2% of the total revenue from business rates, which will do little to alleviate the pressures on Britain’s businesses.”

“However, the chancellor’s actions, including the £300m fund for local councils to offer discretionary relief for hard-hit cases, sound good in principle, but in reality, do little to tackle the underlying issue which pervades

With businesses’ calls for radical rates reform reaching fever pitch, many will be disheartened, if not distressed, that yet again, a viable longterm solution to the rates conundrum has been kicked into the long grass the rates system and creates a real burden for ratepayers.”

Russell Quirk, founder and CEO of eMoov.co.uk, stated that it was a “real shame” Mr Hammond hadn’t resolved the backlash regarding the revaluation of business rates.

“There is an underlying feeling of angst throughout the population surrounding this uncertainty and he would have done well to use his first Budget as a platform to quell these feelings – but has, in effect, chosen to sidestep the issue.”

Alex Fenton, founder and CEO of alternative provider GapCap, added that while the Budget was an opportunity for the government to underpin its support for small businesses, it had taken “half measures at best”.

“The [hike] in business rates will prove a critical point for many young companies already having to cope with substantial overhead costs and the related cash flow problems.”

Alex stated that the vast majority of businesses struggling with this issue have been ignored and any real reforms were pushed back again for months.

“As we know well, for any SME owner a month or two of uncertainty has the potential to irreversibly damage their business.

“It remains to be seen whether [the] government delivers on what has been stated in [the] Budget to support SMEs – the oxygen for the lifeblood of the economy seems to be thinning.

“What is unquestionable is that the future prosperity of the UK economy is fully dependent on creating a more favourable business environment.”

NACFB Magazine | 27

COVER STORY

COVER STORY

The government is now also looking at a better way of taxing the digital part of the economy.

Mr Hammond said: “…There is scope to reform the revaluation process, making it smoother and more frequent, to avoid the dramatic increases that the present system can deliver.

“We will set out our preferred approach in due course and will consult on it before the next revaluation is due.” £1,000 discount on business rates bills for 90% of all UK pubs

Industry reactions Charlotte Rutter, head of marketing at TFC Homeloans, said that Mr Hammond had saved many businesses from going under. “…This pragmatic thinking and the £50 a month cap should be welcomed.

“It will be interesting to see which local authorities will benefit most from the discretionary relief fund, but the bigger picture is that this is a sensible move to keep Britain’s nation of shopkeepers in business.”

Philip Hammond, chancellor of the exchequer

Beth Fisher Editor Bridging & Commercial

Revaluations usually happen every five years, whereby the Valuation Office Agency (VOA) adjusts the rateable value of business properties to reflect changes in the property market.

26 | NACFB Magazine

If a business’s property in England has a rateable value under £18,000 (£25,500 in Greater London) it is considered a small business. If a business does not qualify for small business rate relief, its bill will be calculated using the small business multiplier, which is lower than the standard multiplier.

Since the revaluation came into effect on 1st April, businesses pay the small business multiplier if their property has a rateable value below £51,000.

During the Budget announcement, Mr Hammond explained that the revaluation had raised some hard cases, especially for businesses coming out of small business relief.

Addressing those concerns, Mr Hammond revealed three measures resulting in a further £435m cut in business rates, targeted at small businesses facing the largest increases.

What is included in the £435m business rates relief package?

Businesses coming out of small business rate relief will benefit from an additional cap. Next year, bills for businesses losing the relief won’t increase by more than £50 a month, and subsequent increases will be capped at either the transitional relief cap or £50 a month, whichever is higher A £1,000 discount on business rates bills in 2017 for all pubs with a rateable value of less than £100,000 – 90% of all UK pubs A £300m fund for local authorities to deliver discretionary relief for individual hard cases in their areas

Aamar Aslam, CEO of invoice trading platform Funding Invoice, said that the £300m fund for local authorities would undoubtedly be welcome news.

However, he explained that while a number of SMEs were relocating outside of the big cities as a result of rising commercial rents, they would still face business rate burdens.

“While this £300m fund is a step in the right direction, small businesses are continuing to suffer from cash flow imbalances outside of their control, and require support from government to resolve these issues and keep the economy afloat.”

Nik Moore, senior associate at commercial property and planning consultancy Rapleys, added that this uncertainty would be extended while the government consults on a proper approach to the policy.

“With businesses’ calls for radical rates reform reaching fever pitch, many will be disheartened, if not distressed, that yet

again, a viable long-term solution to the rates conundrum has been kicked into the long grass.

James Souter, partner at Charles Russell Speechlys, said that the Budget provided little comfort for the property industry.

“The stop gap measures the chancellor hopes will keep businesses at bay are of course welcome in principle. Pubs up and down the country have felt the squeeze recently and the £1,000 discount for around 90% of operators will be a real help.

“Looking at the detail, the chancellor’s overall ‘cuts’ actually amount to less than 2% of the total revenue from business rates, which will do little to alleviate the pressures on Britain’s businesses.”

“However, the chancellor’s actions, including the £300m fund for local councils to offer discretionary relief for hard-hit cases, sound good in principle, but in reality, do little to tackle the underlying issue which pervades

With businesses’ calls for radical rates reform reaching fever pitch, many will be disheartened, if not distressed, that yet again, a viable longterm solution to the rates conundrum has been kicked into the long grass the rates system and creates a real burden for ratepayers.”

Russell Quirk, founder and CEO of eMoov.co.uk, stated that it was a “real shame” Mr Hammond hadn’t resolved the backlash regarding the revaluation of business rates.

“There is an underlying feeling of angst throughout the population surrounding this uncertainty and he would have done well to use his first Budget as a platform to quell these feelings – but has, in effect, chosen to sidestep the issue.”

Alex Fenton, founder and CEO of alternative provider GapCap, added that while the Budget was an opportunity for the government to underpin its support for small businesses, it had taken “half measures at best”.

“The [hike] in business rates will prove a critical point for many young companies already having to cope with substantial overhead costs and the related cash flow problems.”

Alex stated that the vast majority of businesses struggling with this issue have been ignored and any real reforms were pushed back again for months.

“As we know well, for any SME owner a month or two of uncertainty has the potential to irreversibly damage their business.

“It remains to be seen whether [the] government delivers on what has been stated in [the] Budget to support SMEs – the oxygen for the lifeblood of the economy seems to be thinning.

“What is unquestionable is that the future prosperity of the UK economy is fully dependent on creating a more favourable business environment.”

NACFB Magazine | 27

Patron | profile

LendingCrowd: 80 years’ worth of experience in funding Stuart Lunn CEO LendingCrowd LendingCrowd is one of the fastestgrowing alternative finance providers to the SME market in the UK. Since launching in 2014, the platform has facilitated approximately £10m in SME business loans and has over 2,000 investors signed up to its platform.

Deals range in size from £20,000 to over £1m and in 2015 the team helped Diet Chef complete one of the largest ever peer-to-peer (P2P) deals in a £1.5m debt finance transaction.

28 | NACFB Magazine

One of our recent deals was Summerhall Distillery – Edinburgh’s first exclusive gin distillery in 150 years – for whom we arranged a £350,000 debt funding round that will allow the award-winning spirits brand to meet demand for its hugely successful, ginfilled Christmas baubles in 2017.

The Summerhall Distillery funding round was a classic type of deal for us, characterised by an ambitious management team, with a fastgrowing business that required access to funding in a quick and efficient manner - not always prevalent when it comes to the high street banks.

In common with many of the SMEs

we have arranged funding for, they told us they valued the personalised approach from LendingCrowd and the time taken to understand the requirements of its business.

Innovative Finance Isa – funds flowing into the sector The launch of Innovative Finance Isas has received a lot of media coverage recently, with LendingCrowd and a handful of other P2P players appearing in the national press. We see a massive opportunity for direct investors and the intermediary market to access the underlying asset class through a tax-efficient wrapper, meaning that we expect significant levels of

funding to flow into the sector and be available for SMEs. LendingCrowd launched one of the first Innovative Finance Isas in February this year with a target return of 6% per annum. With a minimum investment of £1,000 and up to £15,240 in the current tax year, the investment is spread across a portfolio of LendingCrowd loans to established SMEs across the UK.

LendingCrowd provides loans across multiple sectors at competitive rates to businesses that have traded for a minimum of two years and have annual turnover of at least £100,000, with loan terms ranging from six months to five years. Once agreed, loans will appear on the LendingCrowd ‘Loan Market’ where investors are able to bid on them.

What we offer NACFB Members Our combined commitment to product innovation and maintaining the highest levels of customer service in the sector make LendingCrowd an ideal partner for brokers and their clients. In what remains an industry in its relative infancy, our full FCA approval, best-of-class technology and credit expertise have positioned us at the forefront of the market when it comes to the alternative financing of UK SMEs.

LendingCrowd’s credit team has a combined experience of 80 years in working with business loan applications. This team is headed up

by Ian Cunningham, former head of corporate and commercial credit at RBS in Scotland.

in under seven days and your client can be in funds within two to three working days thereafter.

As a Patron of the NACFB, LendingCrowd continues to strengthen its links with the UK’s broker community and offers a dedicated account management team to ensure loan applications and other enquiries are handled quickly and to high standards of customer service.

The LendingCrowd credit team aims to return decisions on loan applications within 48 hours and then works closely with qualifying SMEs and their broker to get them on to the platform as soon as possible. Loans are typically filled

NACFB Magazine | 29

Patron | profile

LendingCrowd: 80 years’ worth of experience in funding Stuart Lunn CEO LendingCrowd LendingCrowd is one of the fastestgrowing alternative finance providers to the SME market in the UK. Since launching in 2014, the platform has facilitated approximately £10m in SME business loans and has over 2,000 investors signed up to its platform.

Deals range in size from £20,000 to over £1m and in 2015 the team helped Diet Chef complete one of the largest ever peer-to-peer (P2P) deals in a £1.5m debt finance transaction.

28 | NACFB Magazine

One of our recent deals was Summerhall Distillery – Edinburgh’s first exclusive gin distillery in 150 years – for whom we arranged a £350,000 debt funding round that will allow the award-winning spirits brand to meet demand for its hugely successful, ginfilled Christmas baubles in 2017.

The Summerhall Distillery funding round was a classic type of deal for us, characterised by an ambitious management team, with a fastgrowing business that required access to funding in a quick and efficient manner - not always prevalent when it comes to the high street banks.

In common with many of the SMEs

we have arranged funding for, they told us they valued the personalised approach from LendingCrowd and the time taken to understand the requirements of its business.

Innovative Finance Isa – funds flowing into the sector The launch of Innovative Finance Isas has received a lot of media coverage recently, with LendingCrowd and a handful of other P2P players appearing in the national press. We see a massive opportunity for direct investors and the intermediary market to access the underlying asset class through a tax-efficient wrapper, meaning that we expect significant levels of

funding to flow into the sector and be available for SMEs. LendingCrowd launched one of the first Innovative Finance Isas in February this year with a target return of 6% per annum. With a minimum investment of £1,000 and up to £15,240 in the current tax year, the investment is spread across a portfolio of LendingCrowd loans to established SMEs across the UK.

LendingCrowd provides loans across multiple sectors at competitive rates to businesses that have traded for a minimum of two years and have annual turnover of at least £100,000, with loan terms ranging from six months to five years. Once agreed, loans will appear on the LendingCrowd ‘Loan Market’ where investors are able to bid on them.

What we offer NACFB Members Our combined commitment to product innovation and maintaining the highest levels of customer service in the sector make LendingCrowd an ideal partner for brokers and their clients. In what remains an industry in its relative infancy, our full FCA approval, best-of-class technology and credit expertise have positioned us at the forefront of the market when it comes to the alternative financing of UK SMEs.

LendingCrowd’s credit team has a combined experience of 80 years in working with business loan applications. This team is headed up

by Ian Cunningham, former head of corporate and commercial credit at RBS in Scotland.

in under seven days and your client can be in funds within two to three working days thereafter.

As a Patron of the NACFB, LendingCrowd continues to strengthen its links with the UK’s broker community and offers a dedicated account management team to ensure loan applications and other enquiries are handled quickly and to high standards of customer service.

The LendingCrowd credit team aims to return decisions on loan applications within 48 hours and then works closely with qualifying SMEs and their broker to get them on to the platform as soon as possible. Loans are typically filled

NACFB Magazine | 29

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

Gavin Diamond, commercial director of bridging at United Trust Bank, shares expertise on credit processes for bridging loans Each lending division at United Trust Bank has its own credit process which is best suited to the type of finance being provided. The process required for agreeing funding for the purchase of an excavator, for example, is different to that required for agreeing a VAT loan for a law firm, and that’s different again to what’s required when assessing a bridging loan. Describing what’s important for each one would take more experts and more space than I have here so as my specialism is bridging, I’ll stick to this.

Q A

What is a decision in principle?

A decision in principle is exactly that. It’s the terms that the lender is prepared to offer to a potential borrower based on the initial information provided to the lender by the broker or borrower. The decision in principle will also set out any relevant conditions that the borrower would need to satisfy or additional information or evidence that would need to be provided, and would be subject to a satisfactory valuation and underwriting. The issuing of a decision in principle reflects the fact that based on the information provided at the outset, the application fits within the broad lending parameters of the lender but will be subject to further due diligence.

30 | NACFB Magazine

Q A

Are decisions in principle worth the paper they’re written on?

The first thing for brokers who are not used to dealing with bridging loans at UTB is to understand that when we provide a decision in principle it is a credit-approved decision. This provides our brokers with confidence – they’ll know that as long as the deal doesn’t change materially from how it was initially presented to us, that the valuation stacks up, that the client’s financial position is as described and the suggested exit is plausible and implementable, we will offer that bridging loan.

If we accurately understand a borrower’s requirements and circumstances, either through a broker completing one of our brief enquiry forms, by speaking to one of us in the team or, as is often the case, a combination of the two, we will be able to issue terms that create realistic expectations between lender, broker and customer at the outset. All parties should enter into a transaction with eyes wide open.

Q A

How much do you need to know?

Everything. When it comes to lending decisions, surprises are not a good thing. It’s vital that the broker has fully understood the customer’s situation and requirements and that they pass all of that information on to us, warts and all. It’s not in anyone’s interest for a lender to be presented with what looks like a straightforward proposal, only for unforeseen problems to be encountered further down the line. Any ‘wrinkles’ not disclosed at the outset will almost certainly be revealed by valuers, solicitors or underwriters during the due diligence stage. This will have an impact on either the amount of money that we are prepared to advance, the rate of interest to be charged or in some circumstances make the deal completely unviable, leaving the customer with a bill for a valuation, possibly legal fees to settle and being no closer to obtaining a bridging loan.

Q

What are the most common issues which can cause a case to be declined or result in changes to the decision in principle at credit committee level?

A

Material differences to any of the information provided, particularly pertaining to the condition or valuation of the security property or properties, the borrower’s credit worthiness or the exit strategy of the loan could result in subsequent changes to the terms. This could be a reduction in the loan amount, an increase in the pricing or, in the most extreme examples, prevent the lender from proceeding at all.

Q A

How can a customer avoid down-valuation problems?

It’s wise to be realistic about the estimated valuations of any security properties and it’s a good idea for the borrower or broker to gather some evidence to support their views. There are many online tools available to assist and if they can’t find evidence which backs up their idea of the valuation, it’s unlikely our valuer will be able to either. Again, being realistic from the outset will save time and expense.

Q A

Is the exit that important?

Yes! As a bridging lender, the viability of the proposed exit is of the utmost importance, regardless of the LTV. We need to be assured that we’re not lending to a customer who does not have a plausible exit strategy in place. If it’s to be funds from the sale of the security property or another property, we’ll want to be comfortable that the property can be sold within the term of the loan for a figure sufficient to repay the loan. If the intended exit is the borrower refinancing a property or properties we’ll need reasonable evidence that the borrower is creditworthy and able to raise sufficient funds from another lender in order to do so.

If, during the course of a loan, the borrower decides to exit via a different route that’s fine by us, but we’ll want to establish at the outset what their primary exit route is, and that it can be implemented within the loan term.

We agree bridging loans for clients with straightforward proposals or those with large property portfolios or a complex set of circumstances. In any scenario the fundamentals remain the same. As long as we know from the outset what we’re dealing with and are comfortable with the exit strategy, we’ll usually be able to put together a solution which meets everyone’s requirements.

NACFB Magazine | 31

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

Gavin Diamond, commercial director of bridging at United Trust Bank, shares expertise on credit processes for bridging loans Each lending division at United Trust Bank has its own credit process which is best suited to the type of finance being provided. The process required for agreeing funding for the purchase of an excavator, for example, is different to that required for agreeing a VAT loan for a law firm, and that’s different again to what’s required when assessing a bridging loan. Describing what’s important for each one would take more experts and more space than I have here so as my specialism is bridging, I’ll stick to this.

Q A

What is a decision in principle?

A decision in principle is exactly that. It’s the terms that the lender is prepared to offer to a potential borrower based on the initial information provided to the lender by the broker or borrower. The decision in principle will also set out any relevant conditions that the borrower would need to satisfy or additional information or evidence that would need to be provided, and would be subject to a satisfactory valuation and underwriting. The issuing of a decision in principle reflects the fact that based on the information provided at the outset, the application fits within the broad lending parameters of the lender but will be subject to further due diligence.

30 | NACFB Magazine

Q A

Are decisions in principle worth the paper they’re written on?

The first thing for brokers who are not used to dealing with bridging loans at UTB is to understand that when we provide a decision in principle it is a credit-approved decision. This provides our brokers with confidence – they’ll know that as long as the deal doesn’t change materially from how it was initially presented to us, that the valuation stacks up, that the client’s financial position is as described and the suggested exit is plausible and implementable, we will offer that bridging loan.

If we accurately understand a borrower’s requirements and circumstances, either through a broker completing one of our brief enquiry forms, by speaking to one of us in the team or, as is often the case, a combination of the two, we will be able to issue terms that create realistic expectations between lender, broker and customer at the outset. All parties should enter into a transaction with eyes wide open.

Q A

How much do you need to know?

Everything. When it comes to lending decisions, surprises are not a good thing. It’s vital that the broker has fully understood the customer’s situation and requirements and that they pass all of that information on to us, warts and all. It’s not in anyone’s interest for a lender to be presented with what looks like a straightforward proposal, only for unforeseen problems to be encountered further down the line. Any ‘wrinkles’ not disclosed at the outset will almost certainly be revealed by valuers, solicitors or underwriters during the due diligence stage. This will have an impact on either the amount of money that we are prepared to advance, the rate of interest to be charged or in some circumstances make the deal completely unviable, leaving the customer with a bill for a valuation, possibly legal fees to settle and being no closer to obtaining a bridging loan.

Q

What are the most common issues which can cause a case to be declined or result in changes to the decision in principle at credit committee level?

A

Material differences to any of the information provided, particularly pertaining to the condition or valuation of the security property or properties, the borrower’s credit worthiness or the exit strategy of the loan could result in subsequent changes to the terms. This could be a reduction in the loan amount, an increase in the pricing or, in the most extreme examples, prevent the lender from proceeding at all.

Q A

How can a customer avoid down-valuation problems?

It’s wise to be realistic about the estimated valuations of any security properties and it’s a good idea for the borrower or broker to gather some evidence to support their views. There are many online tools available to assist and if they can’t find evidence which backs up their idea of the valuation, it’s unlikely our valuer will be able to either. Again, being realistic from the outset will save time and expense.

Q A

Is the exit that important?

Yes! As a bridging lender, the viability of the proposed exit is of the utmost importance, regardless of the LTV. We need to be assured that we’re not lending to a customer who does not have a plausible exit strategy in place. If it’s to be funds from the sale of the security property or another property, we’ll want to be comfortable that the property can be sold within the term of the loan for a figure sufficient to repay the loan. If the intended exit is the borrower refinancing a property or properties we’ll need reasonable evidence that the borrower is creditworthy and able to raise sufficient funds from another lender in order to do so.

If, during the course of a loan, the borrower decides to exit via a different route that’s fine by us, but we’ll want to establish at the outset what their primary exit route is, and that it can be implemented within the loan term.

We agree bridging loans for clients with straightforward proposals or those with large property portfolios or a complex set of circumstances. In any scenario the fundamentals remain the same. As long as we know from the outset what we’re dealing with and are comfortable with the exit strategy, we’ll usually be able to put together a solution which meets everyone’s requirements.

NACFB Magazine | 31

Special | features An up-to-date insight into the industry

SME funding outside the London bubble Although there has been significant progress in the last few years in SMEs’ awareness of alternative funding, many still struggle with obtaining the right loans for their development projects. This is especially true when we turn our attention away from the capital.

Dorian Nineberg Managing director FBSE Finance Ltd

32 | NACFB Magazine

The government’s housing white paper released in February attempted to address – among other things – SMEs’ struggle with development projects, as it revealed that approximately 60% of new homes were built by just 10 companies. There is to be greater emphasis on identifying smaller potential development sites to prevent local authorities from hiding behind fewer, large site allocations to meet their needs. Reducing the number of conditions attached to a planning permission – in particular ones that unnecessarily prevent construction work commencing – will also quicken the process.

It is recognised that the planning and regulatory system needs to be simplified to assist the SME builder – their numbers have fallen by 80% in the last 25 years and the slack has been picked up by large companies.

Based on the government’s white paper, SME developers can now look forward to increased support through the government

with measures such as the homebuilding fund, which is expected to help build more than 25,000 new houses by providing SME loans.

Geographically imbalanced funding One of the key worries that persist in the SME developer sector, however, is the lack of awareness of the availability of funding beyond the high street. This is especially true when we look at non-London based SMEs. A recent report by the Institute for Public Policy Research showed that funding for SMEs is regionally imbalanced across the UK, with Wales and the North East recording some of the lowest loan amounts, compared with London and the South East.

The North East Fund – launched in November 2016 – was one initiative to provide a boost to regional growth; however, part of this fund was made up of the European Regional Development Fund backing and European

Investment Bank finance. It is questionable as to what extent this kind of funding will be accessible for SMEs post-Brexit.

then be reflected in regionally-based SMEs’ awareness of and access to funding.

Many high street banks now have an appetite for residential development finance, but they tend to focus on larger loans for well-established developers with proven track records and with sites in areas of high demand.

The FBSE view Charlotte Hall, head of underwriting at FBSE Finance Ltd, commented: “We have a strong appetite for funding small residential developments outside of the London area. The problem with many of the proposals we are presented with is a lack of adequate due diligence.

Some of the well-established speciality property banks are less accessible now to SME builders due to their minimum loan size and strict criteria, which will rule most SME builders out. However, it is possible that outstanding state aid commitments will see larger banks contributing to the alternative finance sector before Brexit happens – just look at the recent plans for RBS to provide a £750m fund for challenger banks to help incentivise SMEs. Boosting competition will certainly help boost awareness, which could

“In Scotland, another major problem we are experiencing at present is a severe lack of residential development valuers.

This appears to be a consequence of the substantial claims in previous years, which has led to professional indemnity insurers being unwilling to provide cover for small residential development valuations, particularly when the lender is a bridging finance company.”

NACFB Magazine | 33

Special | features An up-to-date insight into the industry

SME funding outside the London bubble Although there has been significant progress in the last few years in SMEs’ awareness of alternative funding, many still struggle with obtaining the right loans for their development projects. This is especially true when we turn our attention away from the capital.

Dorian Nineberg Managing director FBSE Finance Ltd

32 | NACFB Magazine

The government’s housing white paper released in February attempted to address – among other things – SMEs’ struggle with development projects, as it revealed that approximately 60% of new homes were built by just 10 companies. There is to be greater emphasis on identifying smaller potential development sites to prevent local authorities from hiding behind fewer, large site allocations to meet their needs. Reducing the number of conditions attached to a planning permission – in particular ones that unnecessarily prevent construction work commencing – will also quicken the process.

It is recognised that the planning and regulatory system needs to be simplified to assist the SME builder – their numbers have fallen by 80% in the last 25 years and the slack has been picked up by large companies.

Based on the government’s white paper, SME developers can now look forward to increased support through the government

with measures such as the homebuilding fund, which is expected to help build more than 25,000 new houses by providing SME loans.

Geographically imbalanced funding One of the key worries that persist in the SME developer sector, however, is the lack of awareness of the availability of funding beyond the high street. This is especially true when we look at non-London based SMEs. A recent report by the Institute for Public Policy Research showed that funding for SMEs is regionally imbalanced across the UK, with Wales and the North East recording some of the lowest loan amounts, compared with London and the South East.

The North East Fund – launched in November 2016 – was one initiative to provide a boost to regional growth; however, part of this fund was made up of the European Regional Development Fund backing and European

Investment Bank finance. It is questionable as to what extent this kind of funding will be accessible for SMEs post-Brexit.

then be reflected in regionally-based SMEs’ awareness of and access to funding.

Many high street banks now have an appetite for residential development finance, but they tend to focus on larger loans for well-established developers with proven track records and with sites in areas of high demand.

The FBSE view Charlotte Hall, head of underwriting at FBSE Finance Ltd, commented: “We have a strong appetite for funding small residential developments outside of the London area. The problem with many of the proposals we are presented with is a lack of adequate due diligence.

Some of the well-established speciality property banks are less accessible now to SME builders due to their minimum loan size and strict criteria, which will rule most SME builders out. However, it is possible that outstanding state aid commitments will see larger banks contributing to the alternative finance sector before Brexit happens – just look at the recent plans for RBS to provide a £750m fund for challenger banks to help incentivise SMEs. Boosting competition will certainly help boost awareness, which could

“In Scotland, another major problem we are experiencing at present is a severe lack of residential development valuers.

This appears to be a consequence of the substantial claims in previous years, which has led to professional indemnity insurers being unwilling to provide cover for small residential development valuations, particularly when the lender is a bridging finance company.”

NACFB Magazine | 33

SPECIAL FEATURES

Islamic finance: ‘An obvious gap in the market’ clients across the Gulf Cooperation Council, South East Asia and Europe.

Alex Lynn Reporter Bridging & Commercial

Despite this wave of interest, Jon warned that entering the Islamic finance market was no mean feat.

Islamic finance has become something of a phenomenon in recent years.

In just half a decade, Al Rayan – the UK’s only wholly Sharia-compliant retail bank – has reported a 99% surge in demand for its home and buy-to-let (BTL) purchase plans.

This was followed by news that applications for the two home finance products had reached an all-time high in 2016, and the announcement of a 227.6% year-on-year rise in completions during January 2017.

With potential borrowers apparently flocking to the Islamic finance market, some specialist lenders have begun to take notice of this burgeoning sector.

In November, London-based Ortus Secured Finance revealed that it had launched a Sharia-compliant, short-term commercial facility.

The product – structured as a commodity murabaha – involves a metals trade with the customer on deferred payment terms, with the settlement contract secured against the property. The murabaha concept involves selling an item or loan to a customer at a pre-agreed inflated rate.

“Innovation has always been central to our growth strategy,” explained Jon Salisbury, managing director at Ortus.

“Our first product was a start-up pub product and we were one of the first bridging lenders to move into Northern Ireland after the crash.

“It will remain an important business line for specialist brokers and absolutely crucial for certain clients.

“However, it is difficult to see it becoming mainstream in the broker or lender network because the product design and delivery processes are complex.”

“It was clear to us that Sharia-compliant products were rare in our sector, so it was an obvious gap in the market.”

Jon stated that since launching the product, Ortus had received regular enquiries from certain brokers.

“Demand has been strong from a small band of specialist introducers,” he added.

“In our view, this is the only sensible way to grow our exposure because it’s a complex product requiring in-depth knowledge from the lender, broker and borrower.”

New territory In the same month that Ortus launched its first Sharia-compliant product, Maisam Fazal, head of commercial finance at Al Rayan Bank, also acknowledged that there may be a space in the Islamic market for alternative finance models, such as peer-to-peer lending.

The bank itself has recently expanded into new markets, following the opening of a new office in Glasgow and the subsequent introduction of a Shariacompliant BTL range for Scotland.

Meanwhile, in February, Aldermore Bank announced that its group managing director of mortgages, Charles Haresnape, would be leaving the company to join Gatehouse Bank as its CEO. The London-based institution offers Sharia-compliant banking services to

34 | NACFB Magazine

How does it all work?

Under Sharia law, neither banks nor individuals can earn interest on money which has been lent or received.

As such, financial agreements such as lending for home purchases would instead see customers acquire the lender’s share of the property through a monthly payment and pay rent on the unowned portion of the house.

However, as Ortus has demonstrated, commercial finance can also be Sharia-compliant.

For some murabaha, the lender would sell a specific item or loan to the buyer at an agreed marked-up price, while murabaha involving a credit sale would allow the customer to defer payment to the seller or lender.

Islamic finance also allows for some forms of asset finance.

Under one form of lending, the funder would buy an asset and lease it back to a customer at a rental price ultimately worth more than the item.

Meanwhile, a different form of lending allows for both parties to jointly invest in an asset, before the customer gradually purchases the lender’s equity in the project.

SPEED MEETS FLEXIBILITY 020 7655 3388

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.

SPECIAL FEATURES

Islamic finance: ‘An obvious gap in the market’ clients across the Gulf Cooperation Council, South East Asia and Europe.

Alex Lynn Reporter Bridging & Commercial

Despite this wave of interest, Jon warned that entering the Islamic finance market was no mean feat.

Islamic finance has become something of a phenomenon in recent years.

In just half a decade, Al Rayan – the UK’s only wholly Sharia-compliant retail bank – has reported a 99% surge in demand for its home and buy-to-let (BTL) purchase plans.

This was followed by news that applications for the two home finance products had reached an all-time high in 2016, and the announcement of a 227.6% year-on-year rise in completions during January 2017.

With potential borrowers apparently flocking to the Islamic finance market, some specialist lenders have begun to take notice of this burgeoning sector.

In November, London-based Ortus Secured Finance revealed that it had launched a Sharia-compliant, short-term commercial facility.

The product – structured as a commodity murabaha – involves a metals trade with the customer on deferred payment terms, with the settlement contract secured against the property. The murabaha concept involves selling an item or loan to a customer at a pre-agreed inflated rate.

“Innovation has always been central to our growth strategy,” explained Jon Salisbury, managing director at Ortus.

“Our first product was a start-up pub product and we were one of the first bridging lenders to move into Northern Ireland after the crash.

“It will remain an important business line for specialist brokers and absolutely crucial for certain clients.

“However, it is difficult to see it becoming mainstream in the broker or lender network because the product design and delivery processes are complex.”

“It was clear to us that Sharia-compliant products were rare in our sector, so it was an obvious gap in the market.”

Jon stated that since launching the product, Ortus had received regular enquiries from certain brokers.

“Demand has been strong from a small band of specialist introducers,” he added.

“In our view, this is the only sensible way to grow our exposure because it’s a complex product requiring in-depth knowledge from the lender, broker and borrower.”

New territory In the same month that Ortus launched its first Sharia-compliant product, Maisam Fazal, head of commercial finance at Al Rayan Bank, also acknowledged that there may be a space in the Islamic market for alternative finance models, such as peer-to-peer lending.

The bank itself has recently expanded into new markets, following the opening of a new office in Glasgow and the subsequent introduction of a Shariacompliant BTL range for Scotland.

Meanwhile, in February, Aldermore Bank announced that its group managing director of mortgages, Charles Haresnape, would be leaving the company to join Gatehouse Bank as its CEO. The London-based institution offers Sharia-compliant banking services to

34 | NACFB Magazine

How does it all work?

Under Sharia law, neither banks nor individuals can earn interest on money which has been lent or received.

As such, financial agreements such as lending for home purchases would instead see customers acquire the lender’s share of the property through a monthly payment and pay rent on the unowned portion of the house.

However, as Ortus has demonstrated, commercial finance can also be Sharia-compliant.

For some murabaha, the lender would sell a specific item or loan to the buyer at an agreed marked-up price, while murabaha involving a credit sale would allow the customer to defer payment to the seller or lender.

Islamic finance also allows for some forms of asset finance.

Under one form of lending, the funder would buy an asset and lease it back to a customer at a rental price ultimately worth more than the item.

Meanwhile, a different form of lending allows for both parties to jointly invest in an asset, before the customer gradually purchases the lender’s equity in the project.

SPEED MEETS FLEXIBILITY 020 7655 3388

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.

SPECIAL FEATURES

Five reasons that IFIsas will increase investment in alternative finance Bill Fleischmann-Allen Head of The Route – Finance

With the new tax year having just started, everyone in the alternative finance sector is talking about the latest government initiative aimed at helping the industry to grow: the Innovative Finance Isa (IFIsa).

Now entering its second year – with platforms finally approved and ready – the IFIsa is perhaps the most significant chance for the alternative finance industry to break through to mainstream consciousness.

The sector is certainly ready to take advantage of this opportunity. Research agency 4thWay predicts a 50% increase in peer-to-peer (P2P) lending in 2017 following the introduction of the IFIsa, and the Cambridge Centre for Alternative Finance – in their 2015 ‘Pushing Boundaries’ report – notes that P2P consumer and business lenders anticipate a 27% increase in annual volume with the introduction of the IFIsa. There are a few key reasons why IFIsas are turning the alternative finance sector into a financial celebrity.

36 | NACFB Magazine

1

Higher returns than cash Isas With benchmark interest rates at an all-time low, and returns on cash Isas standing at an average of less than 2%, projected IFIsa returns of between 5-9% per annum look very impressive indeed.

2

Transfer from old Isa to IFIsa There are three types of Isas now, but savers can only ‘subscribe’ (or add new funds) to one type of Isa per year.

The good news is that anyone with money currently in a cash Isa or a stocks and shares Isa can transfer their funds to an IFIsa without detracting from their allowance of £20,000 (2017-18), making it simple to get started – and opening up a larger pool of funds to players in the alternative finance sector. Some £80bn was added to Isa accounts in the 2015/16 tax year, up £1bn from the previous year, and the market value of Isa funds was £518bn.

3

Appealing to risk-takers The IFIsa allows investors to deploy their tax-free allowance with a more diverse risk appetite, so it is particularly attractive to sophisticated investors and high-net-worth individuals. Furthermore, it means that more SMEs in need of funding will be matched with investors who are willing to accept higher risk.

4

More direct control and choice Many investors like to have some direct control over their savings and returns. SIPPs provide that freedom with pensions, and the IFIsa offers that same promise for the Isa. Savers can choose where they want to hold an IFIsa account, and have greater opportunity to decide the type of lending and amount of risk in their investments.

5

Increased Isa allowance The second year of the IFIsa comes with a boosted total Isa yearly allowance, increasing this tax year (2017/18) from £15,240 to £20,000.

Investors will be looking for new places to put their money, and may have more appetite for investments that carry higher risk.

Number one: projected IFIsa returns of between 5-9% pa look very impressive indeed The number of companies offering IFIsas was restricted during 2016 as providers sought to obtain full FCA permissions, but 2017 has already seen a significant number of new players enter the market. As IFIsas gain prominence and demonstrate a track record, a significant portion of Isa funds could go to the alternative finance sector to support small and growing businesses in the UK. The Route – Finance’s private debt platform lends funds mandated from The Route – City wealth club’s membership, currently from cash accounts or cash held within SIPP arrangements. The platform presently has around £75m available to deploy, but the inclusion of Isa funds could easily push this total beyond £100m. The Route is already seeking to identify a long-term IFIsa partner to make use of these additional funds.

SPECIAL FEATURES

Five reasons that IFIsas will increase investment in alternative finance Bill Fleischmann-Allen Head of The Route – Finance

With the new tax year having just started, everyone in the alternative finance sector is talking about the latest government initiative aimed at helping the industry to grow: the Innovative Finance Isa (IFIsa).

Now entering its second year – with platforms finally approved and ready – the IFIsa is perhaps the most significant chance for the alternative finance industry to break through to mainstream consciousness.

The sector is certainly ready to take advantage of this opportunity. Research agency 4thWay predicts a 50% increase in peer-to-peer (P2P) lending in 2017 following the introduction of the IFIsa, and the Cambridge Centre for Alternative Finance – in their 2015 ‘Pushing Boundaries’ report – notes that P2P consumer and business lenders anticipate a 27% increase in annual volume with the introduction of the IFIsa. There are a few key reasons why IFIsas are turning the alternative finance sector into a financial celebrity.

36 | NACFB Magazine

1

Higher returns than cash Isas With benchmark interest rates at an all-time low, and returns on cash Isas standing at an average of less than 2%, projected IFIsa returns of between 5-9% per annum look very impressive indeed.

2

Transfer from old Isa to IFIsa There are three types of Isas now, but savers can only ‘subscribe’ (or add new funds) to one type of Isa per year.

The good news is that anyone with money currently in a cash Isa or a stocks and shares Isa can transfer their funds to an IFIsa without detracting from their allowance of £20,000 (2017-18), making it simple to get started – and opening up a larger pool of funds to players in the alternative finance sector. Some £80bn was added to Isa accounts in the 2015/16 tax year, up £1bn from the previous year, and the market value of Isa funds was £518bn.

3

Appealing to risk-takers The IFIsa allows investors to deploy their tax-free allowance with a more diverse risk appetite, so it is particularly attractive to sophisticated investors and high-net-worth individuals. Furthermore, it means that more SMEs in need of funding will be matched with investors who are willing to accept higher risk.

4

More direct control and choice Many investors like to have some direct control over their savings and returns. SIPPs provide that freedom with pensions, and the IFIsa offers that same promise for the Isa. Savers can choose where they want to hold an IFIsa account, and have greater opportunity to decide the type of lending and amount of risk in their investments.

5

Increased Isa allowance The second year of the IFIsa comes with a boosted total Isa yearly allowance, increasing this tax year (2017/18) from £15,240 to £20,000.

Investors will be looking for new places to put their money, and may have more appetite for investments that carry higher risk.

Number one: projected IFIsa returns of between 5-9% pa look very impressive indeed The number of companies offering IFIsas was restricted during 2016 as providers sought to obtain full FCA permissions, but 2017 has already seen a significant number of new players enter the market. As IFIsas gain prominence and demonstrate a track record, a significant portion of Isa funds could go to the alternative finance sector to support small and growing businesses in the UK. The Route – Finance’s private debt platform lends funds mandated from The Route – City wealth club’s membership, currently from cash accounts or cash held within SIPP arrangements. The platform presently has around £75m available to deploy, but the inclusion of Isa funds could easily push this total beyond £100m. The Route is already seeking to identify a long-term IFIsa partner to make use of these additional funds.

SPECIAL FEATURES

Loan support schemes and the Brexit opportunity number of schemes – similar to those of the SBA – once EU restrictions are lifted.

Vera Sugar Editor NACFB Magazine

Since the EU referendum, the outlook for SMEs has been uncertain. With the rapidly approaching trigger of Article 50 launching us into a period of further change, this looks set to continue.

However, there are a number of steps towards expanding SME support from the government that Brexit may be able to bring about – such as support schemes for new and growing small businesses.

What is available?

There are several channels available for SMEs within the UK today. One of the main facilitators is the governmentowned British Business Bank (BBB), which applies guarantees through its partners and operates through schemes such as the Enterprise Finance Guarantee, a scheme which facilitates loans to businesses lacking sufficient security to meet a lender’s normal requirement.

A BBB spokesperson said: “Our programmes are provided either at a national level [such as the Enterprise Finance Guarantee] or regionally, such as the newly launched £400m Northern Powerhouse Investment Fund. Our second regional fund – for the Midlands – launches in spring.”

Support also comes from two investment schemes: the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), both of which help to minimise risk in investing into budding and growing SMEs. The main incentive for investors behind both schemes is the significant tax relief or break they provide.

Venture capital trusts (VCT) are another

38 | NACFB Magazine

Limits on support There are a number of restrictions that apply to the UK government today in terms of providing financial support to SMEs, such as those of the EU-imposed state aid restrictions. State aid is broadly defined as taxpayer-funded government support, some forms of which are banned by the EU Treaty as it can provide an unfair advantage to a company against its competitors – be it on a domestic or international level. State aid restrictions are applied to all member states in order to avoid distorting competition. important source of funding – and some of these have raised the bar quite high this year. For example, Octopus Investments set out to raise the largest amount ever raised through a VCT in January – £120m for its Titan VCT. Simon Rogerson, chief executive of Octopus Investments, called it a “much more mainstream asset class than it was two to three years ago”.

The bank referral scheme – launched in November 2016 – was also a welcome step towards ramping up awareness of alternative finance for small businesses.

Outside the UK Currently there are numerous funding opportunities available for SMEs which are directly linked with the EU, such as from the European Central Bank and the European Investment Fund. The latter backed over 200 venture capital funds in Europe – almost half of all venture investment activity on the continent. However, it remains uncertain as to how much of this funding will be available to the UK after 2019.

A similar institution to the BBB is the US-based Small Business Administration (SBA). While it does not facilitate loans itself, the SBA guarantees loans made to small businesses by private and other institutions, encouraging these loans to qualify more applicants for loan approval.

It also provides several types of schemes for small businesses which lend themselves to different requirements, as well as micro and disaster loans. It is to be seen whether the UK will be setting up an increased

These directives have affected several areas of investment schemes in the UK, such as the minimum age of businesses up for investment, maximum investment amount and what the funding can be used for.

Specialist finance.

By specialists Amicus group provides outstanding solutions for specialist markets. Working with us means you work with real people: talented teams with the drive, experience and insight to make things happen.

Additionally, a persistent issue is the lack of awareness of the EIS and SEIS schemes within investor circles.

Post-Brexit opportunities The question remains as to whether state aid restrictions will continue to apply in the two-year Brexit negotiation period, and when restrictions might be cut off. After leaving the EU, the UK will most likely be bound by the World Trade Organisation’s subsidy rules, which restricts the use of subsidies and allows for charging extra duty on subsidised imports that may be hurting domestic producers.

On the other hand, there is a possibility that the UK will be able to take advantage of a lot more freedoms in terms of SME investment support. With EU restrictions lifted, this will be a perfect opportunity for the government to identify new ways to get involved; and with £400m of funds already allocated in the Autumn Statement in 2016 to the British Business Bank, small businesses have a reason to be optimistic.

property finance

commercial finance

asset finance

Bespoke short-term lending

Flexible invoice discounting

Specialist asset finance

Discover more at amicusplc.co.uk

Amicus is a trading name of Amicus Finance PLC. Registered in England & Wales, no. 06994954. egistered o ce ir treet, ondon 1 5 .

Helping Fund UK Business

SPECIAL FEATURES

Loan support schemes and the Brexit opportunity number of schemes – similar to those of the SBA – once EU restrictions are lifted.

Vera Sugar Editor NACFB Magazine

Since the EU referendum, the outlook for SMEs has been uncertain. With the rapidly approaching trigger of Article 50 launching us into a period of further change, this looks set to continue.

However, there are a number of steps towards expanding SME support from the government that Brexit may be able to bring about – such as support schemes for new and growing small businesses.

What is available?

There are several channels available for SMEs within the UK today. One of the main facilitators is the governmentowned British Business Bank (BBB), which applies guarantees through its partners and operates through schemes such as the Enterprise Finance Guarantee, a scheme which facilitates loans to businesses lacking sufficient security to meet a lender’s normal requirement.

A BBB spokesperson said: “Our programmes are provided either at a national level [such as the Enterprise Finance Guarantee] or regionally, such as the newly launched £400m Northern Powerhouse Investment Fund. Our second regional fund – for the Midlands – launches in spring.”

Support also comes from two investment schemes: the Enterprise Investment Scheme (EIS) and the Seed Enterprise Investment Scheme (SEIS), both of which help to minimise risk in investing into budding and growing SMEs. The main incentive for investors behind both schemes is the significant tax relief or break they provide.

Venture capital trusts (VCT) are another

38 | NACFB Magazine

Limits on support There are a number of restrictions that apply to the UK government today in terms of providing financial support to SMEs, such as those of the EU-imposed state aid restrictions. State aid is broadly defined as taxpayer-funded government support, some forms of which are banned by the EU Treaty as it can provide an unfair advantage to a company against its competitors – be it on a domestic or international level. State aid restrictions are applied to all member states in order to avoid distorting competition. important source of funding – and some of these have raised the bar quite high this year. For example, Octopus Investments set out to raise the largest amount ever raised through a VCT in January – £120m for its Titan VCT. Simon Rogerson, chief executive of Octopus Investments, called it a “much more mainstream asset class than it was two to three years ago”.

The bank referral scheme – launched in November 2016 – was also a welcome step towards ramping up awareness of alternative finance for small businesses.

Outside the UK Currently there are numerous funding opportunities available for SMEs which are directly linked with the EU, such as from the European Central Bank and the European Investment Fund. The latter backed over 200 venture capital funds in Europe – almost half of all venture investment activity on the continent. However, it remains uncertain as to how much of this funding will be available to the UK after 2019.

A similar institution to the BBB is the US-based Small Business Administration (SBA). While it does not facilitate loans itself, the SBA guarantees loans made to small businesses by private and other institutions, encouraging these loans to qualify more applicants for loan approval.

It also provides several types of schemes for small businesses which lend themselves to different requirements, as well as micro and disaster loans. It is to be seen whether the UK will be setting up an increased

These directives have affected several areas of investment schemes in the UK, such as the minimum age of businesses up for investment, maximum investment amount and what the funding can be used for.

Specialist finance.

By specialists Amicus group provides outstanding solutions for specialist markets. Working with us means you work with real people: talented teams with the drive, experience and insight to make things happen.

Additionally, a persistent issue is the lack of awareness of the EIS and SEIS schemes within investor circles.

Post-Brexit opportunities The question remains as to whether state aid restrictions will continue to apply in the two-year Brexit negotiation period, and when restrictions might be cut off. After leaving the EU, the UK will most likely be bound by the World Trade Organisation’s subsidy rules, which restricts the use of subsidies and allows for charging extra duty on subsidised imports that may be hurting domestic producers.

On the other hand, there is a possibility that the UK will be able to take advantage of a lot more freedoms in terms of SME investment support. With EU restrictions lifted, this will be a perfect opportunity for the government to identify new ways to get involved; and with £400m of funds already allocated in the Autumn Statement in 2016 to the British Business Bank, small businesses have a reason to be optimistic.

property finance

commercial finance

asset finance

Bespoke short-term lending

Flexible invoice discounting

Specialist asset finance

Discover more at amicusplc.co.uk

Amicus is a trading name of Amicus Finance PLC. Registered in England & Wales, no. 06994954. egistered o ce ir treet, ondon 1 5 .

Helping Fund UK Business

Industry | guides

A FS GROU P

Insider tips from the Association’s Patrons and Members

Financing the education sector Caroline Langron Managing director Sancus Finance

Financial management has been moving up the business agenda of higher and further educational institutions. They face funding challenges like never before: an increasingly competitive battle for students, the need to invest in development projects to deliver better facilities and pressure to secure a stable supply chain while meeting prompt payment obligations.

To add to this list, the way they receive revenue for students has changed. The government’s move from an upfront student income payment to threestaged payments across the year has disrupted the flow of working capital, affecting how they manage finances while striving to deliver their plans.

Historically these institutions have relied on traditional bank funding, and they continue to do so for many requirements. However, they are increasingly searching for innovative forms of finance which can help them access the funding they need, when they need it. Sancus Finance has responded to this challenge and designed education finance: a specialist structured finance product to address the specific challenges faced by the education sector.

How does it work?

Education finance is an innovative funding solution which offers institutions long-term funding, but with short-term flexibility. It works as a revolving credit facility, delivering an ongoing source of working capital based on the expected student income payments from the government. As there is no security required it doesn’t

interfere with any existing funding arrangements and complements any facilities already in place. It works seamlessly alongside existing finance facilities to deliver higher levels of funding which can be invaluable in the realisation of plans.

There are two ways in which this solution can work. The institution can receive the funding against the expected government payment for student income, ensuring they have a source of working capital to pay their suppliers. Alternatively, Sancus can pay the suppliers directly. Ensuring faster payment to suppliers also supports the sector’s requirement to adhere to prompt payment rules.

The smart funding choice Good financial management in the education sector is a must-have.

Institutions are required to meet both government and borrowing covenants to ensure capital adequacy for investments and cash management for current and future capital expenditures.

Education finance provides the flexibility to enable the funds to be called on as and when required to help the institution meet these requirements and relieve some of the pressure.

As you might expect, the long-term stability of an institution’s supply chain and the continuous supply of critical goods and services is very important to them. Ensuring that suppliers are in good financial health is therefore key. Education finance ensures the institution’s suppliers are paid promptly for goods and services supplied.

Our solution puts institutions back in charge of their finances. They can drive on with their investment plans safe in the knowledge that they have the funds required, and the ability to pay suppliers promptly ensures continuity of service. There is no contract and the cost of finance is more than competitive with other funding options.

BROKER IN A BOX assetfinancesolutions.com

40 | NACFB Magazine

WE’VE GOT YOU COVERED

STRONGER TOGETHER

afscompliance.co.uk

synergy.finance

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.

Industry | guides

A FS GROU P

Insider tips from the Association’s Patrons and Members

Financing the education sector Caroline Langron Managing director Sancus Finance

Financial management has been moving up the business agenda of higher and further educational institutions. They face funding challenges like never before: an increasingly competitive battle for students, the need to invest in development projects to deliver better facilities and pressure to secure a stable supply chain while meeting prompt payment obligations.

To add to this list, the way they receive revenue for students has changed. The government’s move from an upfront student income payment to threestaged payments across the year has disrupted the flow of working capital, affecting how they manage finances while striving to deliver their plans.

Historically these institutions have relied on traditional bank funding, and they continue to do so for many requirements. However, they are increasingly searching for innovative forms of finance which can help them access the funding they need, when they need it. Sancus Finance has responded to this challenge and designed education finance: a specialist structured finance product to address the specific challenges faced by the education sector.

How does it work?

Education finance is an innovative funding solution which offers institutions long-term funding, but with short-term flexibility. It works as a revolving credit facility, delivering an ongoing source of working capital based on the expected student income payments from the government. As there is no security required it doesn’t

interfere with any existing funding arrangements and complements any facilities already in place. It works seamlessly alongside existing finance facilities to deliver higher levels of funding which can be invaluable in the realisation of plans.

There are two ways in which this solution can work. The institution can receive the funding against the expected government payment for student income, ensuring they have a source of working capital to pay their suppliers. Alternatively, Sancus can pay the suppliers directly. Ensuring faster payment to suppliers also supports the sector’s requirement to adhere to prompt payment rules.

The smart funding choice Good financial management in the education sector is a must-have.

Institutions are required to meet both government and borrowing covenants to ensure capital adequacy for investments and cash management for current and future capital expenditures.

Education finance provides the flexibility to enable the funds to be called on as and when required to help the institution meet these requirements and relieve some of the pressure.

As you might expect, the long-term stability of an institution’s supply chain and the continuous supply of critical goods and services is very important to them. Ensuring that suppliers are in good financial health is therefore key. Education finance ensures the institution’s suppliers are paid promptly for goods and services supplied.

Our solution puts institutions back in charge of their finances. They can drive on with their investment plans safe in the knowledge that they have the funds required, and the ability to pay suppliers promptly ensures continuity of service. There is no contract and the cost of finance is more than competitive with other funding options.

BROKER IN A BOX assetfinancesolutions.com

40 | NACFB Magazine

WE’VE GOT YOU COVERED

STRONGER TOGETHER

afscompliance.co.uk

synergy.finance

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.

GUIDES

Market Financial Solutions Bridging with Finesse

The flexibility of cash flow finance Chirag Shah CEO Nucleus Commercial Finance Businesses on the verge of significant growth and expansion often find themselves lacking the necessary funds to move them up a level, with little collateral against which finance can be secured. This awkward scenario is a common one for many service-based businesses, which don’t have assets to use as security.

Cash flow finance – or unsecured lending – is often the solution, but recent research suggests many brokers are still unfamiliar with the product and its benefits. However, this type of lending can form the foundations for a comprehensive business finance package for businesses.

Supporting the business function While a relatively recent development for commercial finance, unsecured business loans are rapidly becoming the solution of choice for many businesses.

This type of facility can provide benefits in multiple ways, such as:

Facilitating business buyouts and buy-ins

We find that invoice finance and property finance facilities are popular additions to unsecured loans, with each supporting a different part of the growth strategy of a business

Encouraging business growth by, for example, allowing for new staff hire or investing in productivity solutions.

a simple promise: we’ll assess each case on its merits, we’ll arrive at a decision quickly, and we’ll be honest and upfront about any costs.

Enabling business expansion, whether this means acquiring new premises or office equipment Helping to pay unexpected bills or invoices Assist SMEs with their working capital requirements

C

The benefits One of the most important aspects of running a business is getting proper and timely funding. Not needing to provide security, which is traditionally required by banks, makes unsecured lending particularly appealing as it allows for a quicker decision. Many lenders will often offer unsecured loans with amounts starting from as little as £5,000 and going up to £500,000, often completing the decision on the day of enquiry. Flexibility is another key aspect of an unsecured business loan, with repayment terms varying from six months to five years and, in some cases, no repayment fee is charged if a request is lodged to finalise before the agreed date.

The right combination Taking out an unsecured loan doesn’t prevent a business from using assets to secure further finance.

We find that invoice finance and property finance facilities are popular additions to unsecured loans, with each supporting a different part of the growth strategy of a business.

Y

CM

MY

CY

CMY

K

COMPETITIVE MONTHLY RATES EXCELLENT INTERMEDIARY INCENTIVES SIMPLICITY OF APPLICATION PROCESS INDEPENDENT LENDERS WITH IN-HOUSE FUNDING

020 7060 1234 info@mfsuk.com www.mfsuk.com

42 | NACFB Magazine

Berkeley Square House, Mayfair, London W1J 6BD

Associate Lender

As a broker, it’s important to be able to place your deal with a lender who will be able to provide a personalised service throughout the process, with a human-to-human approach to underwriting. Here at Nucleus Commercial Finance, this is what we strive for. Our approach to providing unsecured business loans is tailored to the requirements of the individual borrower. We make

It’s always about what is right for your client’s business. The alternative lending space is growing and offers many different products, usually with greater speed and agility. There are many government-run schemes to support SMEs, but these tend to be aimed at the smaller end of the market and often take too long to come to fruition. One opportunity for alternative lenders to partner with intermediaries lies with the larger or growing businesses disrupting the market, which might not fit traditional high street lender checklists.

M

SPECIALIST IN COMPLEX DEALS

Association of Bridging Professionals

GUIDES

Market Financial Solutions Bridging with Finesse

The flexibility of cash flow finance Chirag Shah CEO Nucleus Commercial Finance Businesses on the verge of significant growth and expansion often find themselves lacking the necessary funds to move them up a level, with little collateral against which finance can be secured. This awkward scenario is a common one for many service-based businesses, which don’t have assets to use as security.

Cash flow finance – or unsecured lending – is often the solution, but recent research suggests many brokers are still unfamiliar with the product and its benefits. However, this type of lending can form the foundations for a comprehensive business finance package for businesses.

Supporting the business function While a relatively recent development for commercial finance, unsecured business loans are rapidly becoming the solution of choice for many businesses.

This type of facility can provide benefits in multiple ways, such as:

Facilitating business buyouts and buy-ins

We find that invoice finance and property finance facilities are popular additions to unsecured loans, with each supporting a different part of the growth strategy of a business

Encouraging business growth by, for example, allowing for new staff hire or investing in productivity solutions.

a simple promise: we’ll assess each case on its merits, we’ll arrive at a decision quickly, and we’ll be honest and upfront about any costs.

Enabling business expansion, whether this means acquiring new premises or office equipment Helping to pay unexpected bills or invoices Assist SMEs with their working capital requirements

C

The benefits One of the most important aspects of running a business is getting proper and timely funding. Not needing to provide security, which is traditionally required by banks, makes unsecured lending particularly appealing as it allows for a quicker decision. Many lenders will often offer unsecured loans with amounts starting from as little as £5,000 and going up to £500,000, often completing the decision on the day of enquiry. Flexibility is another key aspect of an unsecured business loan, with repayment terms varying from six months to five years and, in some cases, no repayment fee is charged if a request is lodged to finalise before the agreed date.

The right combination Taking out an unsecured loan doesn’t prevent a business from using assets to secure further finance.

We find that invoice finance and property finance facilities are popular additions to unsecured loans, with each supporting a different part of the growth strategy of a business.

Y

CM

MY

CY

CMY

K

COMPETITIVE MONTHLY RATES EXCELLENT INTERMEDIARY INCENTIVES SIMPLICITY OF APPLICATION PROCESS INDEPENDENT LENDERS WITH IN-HOUSE FUNDING

020 7060 1234 info@mfsuk.com www.mfsuk.com

42 | NACFB Magazine

Berkeley Square House, Mayfair, London W1J 6BD

Associate Lender

As a broker, it’s important to be able to place your deal with a lender who will be able to provide a personalised service throughout the process, with a human-to-human approach to underwriting. Here at Nucleus Commercial Finance, this is what we strive for. Our approach to providing unsecured business loans is tailored to the requirements of the individual borrower. We make

It’s always about what is right for your client’s business. The alternative lending space is growing and offers many different products, usually with greater speed and agility. There are many government-run schemes to support SMEs, but these tend to be aimed at the smaller end of the market and often take too long to come to fruition. One opportunity for alternative lenders to partner with intermediaries lies with the larger or growing businesses disrupting the market, which might not fit traditional high street lender checklists.

M

SPECIALIST IN COMPLEX DEALS

Association of Bridging Professionals

Debate | the burning issues Two Patrons discuss the hot topics affecting the industry

On the blazing trail Steady evolution, not radical revolution Matthew Tooth Chief commercial officer LendInvest

While most financial firms - and even the Bank of England - have opened their eyes to the potential improvements new technology can offer to the processes they provide and the customers they serve, the mortgage market remains the one area of financial services that has resisted many of technology’s charms.

Despite this, over the past year, more and more emerging proptech businesses are cropping up to show us how much the mortgage industry has to gain from the improved adoption of technology.

With any new technology, the immediate questions should be: why should I adopt this new technology, and how will it improve my existing setup? What can it do for the end consumer? When it comes to the mortgage market, the easy answer is often that new technology would speed up the process, which in its current guise could politely be described as ‘pedestrian’.

But the pursuit of speed for speed’s sake is a mistaken goal, and one that will inevitably threaten the credit controls and safeguards responsible lenders work so hard to put in place to protect borrowers and their advisers.

No: technology has more to offer mortgage lenders and intermediaries

44 | NACFB Magazine

than simply speed. The companies that get it right will be the ones whose new tech tools improve communication and efficiency across the mortgage process, ensuring that quality, experienced staff are able to do their jobs better. It will also transform the process of getting a mortgage into a friendly, understandable and importantly, online transaction.

In turn, all this culminates in a faster mortgage process, but the improved speed is an added bonus, not the motivating factor.

‘Digitisation, not disintermediation’ Another misconception is what the chairman of the UK PropTech Association neatly terms “Digitisation, not disintermediation”.

It’s fair to say that aspects of the mortgage lending system are looking a little outdated, relying on oldfashioned methodologies, often simply because that is the way it was always done. But anyone that knows the mortgage market is aware that barrelling in with brand new tech infrastructures that promise to revamp the entire mortgage system overnight simply isn’t going to work.

There are some fantastic business people working in the mortgage world today whose whole careers have been based offline. Forcing technology on them is the wrong approach. But increasingly these professionals accept that mortgage customers will come to expect the same speed and efficiency of service from their lender or broker as they do from Amazon, eBay and every other service provider they can access from their smartphones.

A force for good Mortgages of course are just one part of the broad property ecosystem where there are lessons already to be learned from several proptech success stories.

Technology has more to offer mortgage lenders and intermediaries than simply speed For instance, you only have to look at Zoopla, Rightmove or Purplebricks to see how technology has changed the face of finding a property or selling one. Firms like these are great examples of just how technology can make a difference beyond simply improving speed. They use technology to help lift some of the burden of the time-heavy administrative tasks, freeing up time for staff to devote their energies towards the meaningful tasks that require a human touch.

As we increasingly see the benefits that technology can bring to other areas of financial services, the mortgage market simply has to follow suit. By talking more about proptech among mortgage lenders and brokers, and accepting it more readily into the lexicon of mortgages as a force for good, change will come incrementally and positively.

And the architects of this change will be businesses that truly understand the mortgage process and know exactly where technology can improve it piece by piece, rather than those promising a wholesale revolution.

If I had been buying a commercial property ... would I have attempted to get a mortgage online? Absolutely not.

of proptech Proptech and commercial mortgages are not a good match Laura Jones BDM Devon & Cornwall Securities Limited Today, for most, the prospect of going to a travel agency branch to book a holiday seems absurd. Why wouldn’t I just book my trip online? I needn’t leave my house; I can compare hundreds of deals simultaneously and I don’t have to deal with salesmen.

Does the same destiny await estate agencies? Are we there already?

Research from Begbies Traynor revealed that property companies’ transactions were 7.3% lower in November 2016 than they were one year previously. This has led to estate agents’ share prices plummeting in 2016 – Foxtons and Countrywide have fallen by 37.42% and 48.7% respectively in the last 12 months (correct as 2nd March 2017).

Online transaction with no roadblocks I exchanged on my first home in February (a property which I found on Rightmove - one of the most well-known examples of proptech providers) and I never even set foot in an estate agency branch throughout the entire buying process. I didn’t have a telephone conversation with an estate agent and had an agent not attended one of the property viewings, I’d have never even met one. Everything was handled online and, as far as I’m concerned, if I were

to sell the property in the future, I would absolutely consider proptech companies like Purplebricks to sell my house as opposed to a traditional estate agency. Why wouldn’t I, when Purplebricks charges a basic fee of only £849 (£1,119 in London), while a local estate agency charge 1.25% + VAT of the sale price? It seems that many others today share my sentiment as Purplebricks has seen a share rise of a whopping 126.86% in the last 12 months.

The rise in proptech for residential property has been unprecedented - but how about the commercial market? A 30 mile radius search of commercial property from our head office revealed nothing for sale through Purplebricks, in contrast with 160 residential listings. Clearly proptech has not yet had the influence on the commercial sector that it had on residential. But how will proptech’s inevitable growth in the commercial market affect those in the commercial mortgage industry?

Commercial finance brokers prevail Of course, more people using proptech leads to more listings on sites, with more sales and more people wanting commercial mortgages, which can only be a good thing. But what about leads that arrive from estate agents – where will they come from? Will it give rise to more online traffic heading to fintech and how do we ensure our presence in this territory?

mortgages online, thus avoiding the need to involve the traditional broker. This was my attitude to my own residential mortgage. That said, can fintech really provide the best solution when it comes to arranging commercial finance?

Take Devon & Cornwall Securities.

We’re neither a bridging lender, nor a term lender. We’re unique in the commercial mortgage market and we can be the answer for lending where applicants want the option of an open-ended mortgage. Where would we be placed in the fintech market? Who would we be compared against? Can you successfully compare an open-ended, term and bridging loan? If I had been buying a commercial property through proptech, would I have attempted to get a mortgage online? Absolutely not.

Perhaps it is this sector’s complexity that allows the commercial mortgage broking industry to maintain such strong growth and be less affected than others, in a world where so many of us are becoming reliant on the internet to arrange our affairs.

It has been widely recognised that the growth of proptech could enhance the fintech market with consumers opting to arrange all their property and finance transactions online.

With the rise in use of comparison sites for mortgages, insurance and credit, many people may feel capable of arranging their own

NACFB Magazine | 45

Debate | the burning issues Two Patrons discuss the hot topics affecting the industry

On the blazing trail Steady evolution, not radical revolution Matthew Tooth Chief commercial officer LendInvest

While most financial firms - and even the Bank of England - have opened their eyes to the potential improvements new technology can offer to the processes they provide and the customers they serve, the mortgage market remains the one area of financial services that has resisted many of technology’s charms.

Despite this, over the past year, more and more emerging proptech businesses are cropping up to show us how much the mortgage industry has to gain from the improved adoption of technology.

With any new technology, the immediate questions should be: why should I adopt this new technology, and how will it improve my existing setup? What can it do for the end consumer? When it comes to the mortgage market, the easy answer is often that new technology would speed up the process, which in its current guise could politely be described as ‘pedestrian’.

But the pursuit of speed for speed’s sake is a mistaken goal, and one that will inevitably threaten the credit controls and safeguards responsible lenders work so hard to put in place to protect borrowers and their advisers.

No: technology has more to offer mortgage lenders and intermediaries

44 | NACFB Magazine

than simply speed. The companies that get it right will be the ones whose new tech tools improve communication and efficiency across the mortgage process, ensuring that quality, experienced staff are able to do their jobs better. It will also transform the process of getting a mortgage into a friendly, understandable and importantly, online transaction.

In turn, all this culminates in a faster mortgage process, but the improved speed is an added bonus, not the motivating factor.

‘Digitisation, not disintermediation’ Another misconception is what the chairman of the UK PropTech Association neatly terms “Digitisation, not disintermediation”.

It’s fair to say that aspects of the mortgage lending system are looking a little outdated, relying on oldfashioned methodologies, often simply because that is the way it was always done. But anyone that knows the mortgage market is aware that barrelling in with brand new tech infrastructures that promise to revamp the entire mortgage system overnight simply isn’t going to work.

There are some fantastic business people working in the mortgage world today whose whole careers have been based offline. Forcing technology on them is the wrong approach. But increasingly these professionals accept that mortgage customers will come to expect the same speed and efficiency of service from their lender or broker as they do from Amazon, eBay and every other service provider they can access from their smartphones.

A force for good Mortgages of course are just one part of the broad property ecosystem where there are lessons already to be learned from several proptech success stories.

Technology has more to offer mortgage lenders and intermediaries than simply speed For instance, you only have to look at Zoopla, Rightmove or Purplebricks to see how technology has changed the face of finding a property or selling one. Firms like these are great examples of just how technology can make a difference beyond simply improving speed. They use technology to help lift some of the burden of the time-heavy administrative tasks, freeing up time for staff to devote their energies towards the meaningful tasks that require a human touch.

As we increasingly see the benefits that technology can bring to other areas of financial services, the mortgage market simply has to follow suit. By talking more about proptech among mortgage lenders and brokers, and accepting it more readily into the lexicon of mortgages as a force for good, change will come incrementally and positively.

And the architects of this change will be businesses that truly understand the mortgage process and know exactly where technology can improve it piece by piece, rather than those promising a wholesale revolution.

If I had been buying a commercial property ... would I have attempted to get a mortgage online? Absolutely not.

of proptech Proptech and commercial mortgages are not a good match Laura Jones BDM Devon & Cornwall Securities Limited Today, for most, the prospect of going to a travel agency branch to book a holiday seems absurd. Why wouldn’t I just book my trip online? I needn’t leave my house; I can compare hundreds of deals simultaneously and I don’t have to deal with salesmen.

Does the same destiny await estate agencies? Are we there already?

Research from Begbies Traynor revealed that property companies’ transactions were 7.3% lower in November 2016 than they were one year previously. This has led to estate agents’ share prices plummeting in 2016 – Foxtons and Countrywide have fallen by 37.42% and 48.7% respectively in the last 12 months (correct as 2nd March 2017).

Online transaction with no roadblocks I exchanged on my first home in February (a property which I found on Rightmove - one of the most well-known examples of proptech providers) and I never even set foot in an estate agency branch throughout the entire buying process. I didn’t have a telephone conversation with an estate agent and had an agent not attended one of the property viewings, I’d have never even met one. Everything was handled online and, as far as I’m concerned, if I were

to sell the property in the future, I would absolutely consider proptech companies like Purplebricks to sell my house as opposed to a traditional estate agency. Why wouldn’t I, when Purplebricks charges a basic fee of only £849 (£1,119 in London), while a local estate agency charge 1.25% + VAT of the sale price? It seems that many others today share my sentiment as Purplebricks has seen a share rise of a whopping 126.86% in the last 12 months.

The rise in proptech for residential property has been unprecedented - but how about the commercial market? A 30 mile radius search of commercial property from our head office revealed nothing for sale through Purplebricks, in contrast with 160 residential listings. Clearly proptech has not yet had the influence on the commercial sector that it had on residential. But how will proptech’s inevitable growth in the commercial market affect those in the commercial mortgage industry?

Commercial finance brokers prevail Of course, more people using proptech leads to more listings on sites, with more sales and more people wanting commercial mortgages, which can only be a good thing. But what about leads that arrive from estate agents – where will they come from? Will it give rise to more online traffic heading to fintech and how do we ensure our presence in this territory?

mortgages online, thus avoiding the need to involve the traditional broker. This was my attitude to my own residential mortgage. That said, can fintech really provide the best solution when it comes to arranging commercial finance?

Take Devon & Cornwall Securities.

We’re neither a bridging lender, nor a term lender. We’re unique in the commercial mortgage market and we can be the answer for lending where applicants want the option of an open-ended mortgage. Where would we be placed in the fintech market? Who would we be compared against? Can you successfully compare an open-ended, term and bridging loan? If I had been buying a commercial property through proptech, would I have attempted to get a mortgage online? Absolutely not.

Perhaps it is this sector’s complexity that allows the commercial mortgage broking industry to maintain such strong growth and be less affected than others, in a world where so many of us are becoming reliant on the internet to arrange our affairs.

It has been widely recognised that the growth of proptech could enhance the fintech market with consumers opting to arrange all their property and finance transactions online.

With the rise in use of comparison sites for mortgages, insurance and credit, many people may feel capable of arranging their own

NACFB Magazine | 45

Opinion | & commentary Thought leadership from our Patrons and Members

The rising stars of regional planning Michael Dean Principal Avamore Capital

Planning applications for residential developments have fallen substantially in London over the past 12 months. Yet, regionally, applications in many locations are at their most buoyant since the financial crisis.

Concurrently, we are witnessing a big shift in enquiries. First, their nature – much more focused on development or adding value, and second, their geography – much more outside the M25, and particularly in our most popular regional markets: Reading, Oxford and the southwestern property powerhouse Bristol.

So, what is driving these changes? it is important to address the change from (unregulated) bridging-focused enquiries to those that add value (ie refurbishments or planning plays) and development loans. The key drivers are as follows: 3% stamp duty on second properties has levelled the playing field for owneroccupiers and made it harder for buy-tolet landlords to compete on price Changes to the taxation of buy-to-lets has reduced buying appetite, particularly in London Fear of selling into a falling market post-Brexit has put off would-be sellers, reducing the supply of available properties Demand from owner-occupiers remains strong outside more expensive London

46 | NACFB Magazine

markets and developers are seeking to capitalise on this demand by buying and delivering consented sites.

An increase in geographical shifts London has seen an unprecedented level of price growth since the last recession, with most sub-markets nearly doubling in price. This means affordability for the average Londoner is at an all-time low.

Up until around 18 months ago, this was not necessarily an issue for the bigger developers because they were selling the properties to foreign buyers. However, by way of a triple whammy of tax/ legislative changes, the government has made London much less attractive to foreign buyers. These taxation issues have made them wary of making property purchases in London and we are now witnessing fast-paced rental growth.

Remarkably, however, you do not need to venture far outside of London to witness a different story. Bristol is booming with rising sales prices stimulating development.

These rising prices are unlocking previously dormant development sites (especially in St Pauls and around the centre of the city), leading to increased land promotion through the planning system. We’ve seen a big rise

in development-led enquiries (and deal closings) since the second half of last year.

Bristol offers a great quality of life, yet prime properties are still only £500 per sq ft (vs prime London in excess of £2,500 per sq ft). Additionally, we are aware of anecdotal evidence of many Londoners moving to Bristol to benefit from the improved quality of life, good schooling and lower cost of living (particularly housing).

Furthermore, in Reading – an area that has already benefited from the Crossrail effect in its residential property market – we have seen a big rise in development activity. We have agreed to fund two separate small developments this year and have a strong pipeline of further opportunities.

Much maligned Slough – often regarded as Reading’s ugly sister – is also seeing strong growth, having been the UK’s best-performing property market in 2016, according to Savills. A close proximity to London, strong local employment bases and access to Heathrow make Slough a natural investment target, yet only now are major developers willing to invest heavily in the location. Similar trends can be seen across southern England as affordability and

connectivity continue to drive growth away from the capital.

... Affordability and connectivity continue to drive growth away from the capital

Interestingly, regional cities, such as Birmingham, are now on the map for Asian investors too, thanks to the marketing efforts of the likes of Seven Capital, making sites in areas such as the jewellery quarter gold dust for developers.

Manchester, too, is witnessing strong growth in development, although this is more focused on the private rented sector, rather than private sale markets, thanks to a growing local economy and strong management by the local authority.

It was only once regional locations appeared to offer good relative value that growth has emerged. That is ultimately the underlying theme behind the shift in development activity from London to the regions in the past 12 months. Only when London offers good value relative to the regions will the balance shift back.

NACFB Magazine | 47

Opinion | & commentary Thought leadership from our Patrons and Members

The rising stars of regional planning Michael Dean Principal Avamore Capital

Planning applications for residential developments have fallen substantially in London over the past 12 months. Yet, regionally, applications in many locations are at their most buoyant since the financial crisis.

Concurrently, we are witnessing a big shift in enquiries. First, their nature – much more focused on development or adding value, and second, their geography – much more outside the M25, and particularly in our most popular regional markets: Reading, Oxford and the southwestern property powerhouse Bristol.

So, what is driving these changes? it is important to address the change from (unregulated) bridging-focused enquiries to those that add value (ie refurbishments or planning plays) and development loans. The key drivers are as follows: 3% stamp duty on second properties has levelled the playing field for owneroccupiers and made it harder for buy-tolet landlords to compete on price Changes to the taxation of buy-to-lets has reduced buying appetite, particularly in London Fear of selling into a falling market post-Brexit has put off would-be sellers, reducing the supply of available properties Demand from owner-occupiers remains strong outside more expensive London

46 | NACFB Magazine

markets and developers are seeking to capitalise on this demand by buying and delivering consented sites.

An increase in geographical shifts London has seen an unprecedented level of price growth since the last recession, with most sub-markets nearly doubling in price. This means affordability for the average Londoner is at an all-time low.

Up until around 18 months ago, this was not necessarily an issue for the bigger developers because they were selling the properties to foreign buyers. However, by way of a triple whammy of tax/ legislative changes, the government has made London much less attractive to foreign buyers. These taxation issues have made them wary of making property purchases in London and we are now witnessing fast-paced rental growth.

Remarkably, however, you do not need to venture far outside of London to witness a different story. Bristol is booming with rising sales prices stimulating development.

These rising prices are unlocking previously dormant development sites (especially in St Pauls and around the centre of the city), leading to increased land promotion through the planning system. We’ve seen a big rise

in development-led enquiries (and deal closings) since the second half of last year.

Bristol offers a great quality of life, yet prime properties are still only £500 per sq ft (vs prime London in excess of £2,500 per sq ft). Additionally, we are aware of anecdotal evidence of many Londoners moving to Bristol to benefit from the improved quality of life, good schooling and lower cost of living (particularly housing).

Furthermore, in Reading – an area that has already benefited from the Crossrail effect in its residential property market – we have seen a big rise in development activity. We have agreed to fund two separate small developments this year and have a strong pipeline of further opportunities.

Much maligned Slough – often regarded as Reading’s ugly sister – is also seeing strong growth, having been the UK’s best-performing property market in 2016, according to Savills. A close proximity to London, strong local employment bases and access to Heathrow make Slough a natural investment target, yet only now are major developers willing to invest heavily in the location. Similar trends can be seen across southern England as affordability and

connectivity continue to drive growth away from the capital.

... Affordability and connectivity continue to drive growth away from the capital

Interestingly, regional cities, such as Birmingham, are now on the map for Asian investors too, thanks to the marketing efforts of the likes of Seven Capital, making sites in areas such as the jewellery quarter gold dust for developers.

Manchester, too, is witnessing strong growth in development, although this is more focused on the private rented sector, rather than private sale markets, thanks to a growing local economy and strong management by the local authority.

It was only once regional locations appeared to offer good relative value that growth has emerged. That is ultimately the underlying theme behind the shift in development activity from London to the regions in the past 12 months. Only when London offers good value relative to the regions will the balance shift back.

NACFB Magazine | 47

OPINION & COMMENTARY

Why professional indemnity insurance?

Norman Chambers Deputy CEO NACFB

At the NACFB we have insisted on Members having professional indemnity (PI) insurance since the turn of the millennium.

It comes as a real surprise to us, then, when we find individual Members who have allowed theirs to lapse, or who have no plans to sign up for insurance.

We’ve been banging the drum for best practice, so we believed the message was getting across, and in nearly all cases, it is. But there are still some who don’t grasp the point of holding PI cover; I even hear of some funders and lenders accepting introductions from intermediaries without it. I just don’t get it. Surely it’s just a matter of time before the FCA will make this mandatory.

So, let’s address the fundamentals.

Without PI insurance, brokers could be liable for thousands of pounds’ worth of legal fees and compensation payments – not to mention lost income from the time spent defending any allegation.

PI insurance, often referred to as professional liability insurance, covers legal costs and expenses incurred in your defence, as well as any costs that may be awarded if you are alleged to have provided inadequate advice or services that cause your client to lose money.

48 | NACFB Magazine

Standard cover provides protection for activities such as commercial finance, commercial buy-to-let, secured loans, bridging finance and asset financing & leasing. There is also the option to extend cover to include other regulated activities.

We don’t accept the argument that PI insurance is an unjustifiably high expense. Some brokers wear watches that represent the value of several years’ worth of insurance, and if they can justify the watch…

Imagine setting off on a drive from Worcester to Wick and leaving your wallet behind to save weight. The fuel economy of the car and the full tank suggests you won’t need to refuel on the way. In fact, you’re confident you can go 600 miles without filling up.

Very confident. The manufacturer says you can do it, your own experience says you can do it… but why leave the credit card at home? The cost of taking that extra weight along is so small relative to the potential cost of being caught out that, no matter how certain you are that you won’t need it, you’d still take it with you. It can’t do any harm to carry the insurance.

Or if your gas supply is leaking or outdated, you’d call in someone reputable, with the CORGI certificate.

Again, the extra cost has to be weighed against the unlikely but possible

cost of something going wrong.

You might think you can predict everything that is going to happen to your business, but you can’t. You might feel certain that you will never fall into the trap of giving advice to someone who misuses it and holds you responsible. Never is a very long time though, and you can’t wait until a situation arises and then arrange immediate insurance cover for the conversation you’re about to have.

On the very rare occasions it does all go wrong, you are facing the equivalent of a gas boiler exploding.

Your entire livelihood is at stake. Less critical to the individual broker, but important for us, is the reputational damage to an Association that allows its Members to sport a logo and to rely on our document templates.

“We went for the best broker,” the client will say, “and he/she didn’t even have the basics in place.” That’s when it becomes too late to have the argument that you were confident you would never need insurance.

Throughout 2017 we are clamping down on what we might term ‘insurance evasion’. Like tax evasion, it’s unacceptable, and Members who practice it will be given the choice. Insure themselves, or find another Association!

C

M

No egg hunts.

Just great service.

Y

CM

MY

CY

CMY

K

Instant quote

No early repayment fees

Decision typically within 2 working days

Loans from 6 months to 5 years

Unsecured loans up to £350,000 with a personal guarantee

Speak to a BDM today 0800 014 8642

OPINION & COMMENTARY

Why professional indemnity insurance?

Norman Chambers Deputy CEO NACFB

At the NACFB we have insisted on Members having professional indemnity (PI) insurance since the turn of the millennium.

It comes as a real surprise to us, then, when we find individual Members who have allowed theirs to lapse, or who have no plans to sign up for insurance.

We’ve been banging the drum for best practice, so we believed the message was getting across, and in nearly all cases, it is. But there are still some who don’t grasp the point of holding PI cover; I even hear of some funders and lenders accepting introductions from intermediaries without it. I just don’t get it. Surely it’s just a matter of time before the FCA will make this mandatory.

So, let’s address the fundamentals.

Without PI insurance, brokers could be liable for thousands of pounds’ worth of legal fees and compensation payments – not to mention lost income from the time spent defending any allegation.

PI insurance, often referred to as professional liability insurance, covers legal costs and expenses incurred in your defence, as well as any costs that may be awarded if you are alleged to have provided inadequate advice or services that cause your client to lose money.

48 | NACFB Magazine

Standard cover provides protection for activities such as commercial finance, commercial buy-to-let, secured loans, bridging finance and asset financing & leasing. There is also the option to extend cover to include other regulated activities.

We don’t accept the argument that PI insurance is an unjustifiably high expense. Some brokers wear watches that represent the value of several years’ worth of insurance, and if they can justify the watch…

Imagine setting off on a drive from Worcester to Wick and leaving your wallet behind to save weight. The fuel economy of the car and the full tank suggests you won’t need to refuel on the way. In fact, you’re confident you can go 600 miles without filling up.

Very confident. The manufacturer says you can do it, your own experience says you can do it… but why leave the credit card at home? The cost of taking that extra weight along is so small relative to the potential cost of being caught out that, no matter how certain you are that you won’t need it, you’d still take it with you. It can’t do any harm to carry the insurance.

Or if your gas supply is leaking or outdated, you’d call in someone reputable, with the CORGI certificate.

Again, the extra cost has to be weighed against the unlikely but possible

cost of something going wrong.

You might think you can predict everything that is going to happen to your business, but you can’t. You might feel certain that you will never fall into the trap of giving advice to someone who misuses it and holds you responsible. Never is a very long time though, and you can’t wait until a situation arises and then arrange immediate insurance cover for the conversation you’re about to have.

On the very rare occasions it does all go wrong, you are facing the equivalent of a gas boiler exploding.

Your entire livelihood is at stake. Less critical to the individual broker, but important for us, is the reputational damage to an Association that allows its Members to sport a logo and to rely on our document templates.

“We went for the best broker,” the client will say, “and he/she didn’t even have the basics in place.” That’s when it becomes too late to have the argument that you were confident you would never need insurance.

Throughout 2017 we are clamping down on what we might term ‘insurance evasion’. Like tax evasion, it’s unacceptable, and Members who practice it will be given the choice. Insure themselves, or find another Association!

C

M

No egg hunts.

Just great service.

Y

CM

MY

CY

CMY

K

Instant quote

No early repayment fees

Decision typically within 2 working days

Loans from 6 months to 5 years

Unsecured loans up to £350,000 with a personal guarantee

Speak to a BDM today 0800 014 8642

BRIDGING FINANCE OPINION & COMMENTARY

What’s driving asset finance growth?

Tristan Watkins CEO BNP Paribas Leasing Solutions UK

Online bridging valuations in an instant

This is the sixth consecutive year of growth and much of it was driven by new business in the commercial vehicle sector, which increased by 7% in 2016.

In today’s uncertain economy, small businesses – such as plumbers and delivery companies – are under increased pressure to stay competitive in a fast-moving market, yet many don’t have the funds to purchase essential business equipment upfront. As a result, commercial vehicle finance is proving an increasingly popular route for small businesses looking to replace or upgrade their vans, rather than an upfront purchase.

Growth drivers According to the Society of Motor Manufacturers and Traders, more vans are hitting the road in Britain than ever before, driving the demand for finance. A record number of vans and pick-ups were registered in 2016, totalling 375,687 and marking the fourth consecutive year of growth.

The ecommerce boom is one factor behind this, leading to ever larger numbers of vehicles on the road. Changing shopping habits – combined with increased consumer expectations around next-day and even same-day delivery – mean that delivery companies are looking to expand their fleets.

The UK ecommerce market is the biggest in Europe, and the third strongest worldwide. So far this year, UK ecommerce sales rose 12% year-on-year in January, suggesting that the sector’s success is set to continue despite concerns over the devaluation of the pound.

50 | NACFB Magazine

Another factor in play is the increased number of people setting up their own businesses, particularly builders and related trades. These self-employed sole traders are behind increased demand for new vans and, given tight budgets and cash flow worries, they are even more likely to look to finance to help them obtain the best van for their business.

those that aren’t VAT-registered, this cost can be prohibitive. A finance lease on the other hand has a low upfront cost as it allows small businesses to spread the cost of the VAT. This is a significant benefit for non-VAT registered businesses allowing them to set aside valuable cash reserves for essential investment in order to make money or expand operations.

Finance channels Most businesses secure finance directly, according to the FLA, while sales finance through a dealer or reseller is the second most popular channel. However, more and more businesses are turning to brokers to introduce them to the right finance, with a 10% increase in this channel in 2016.

Budget concerns Ultimately, budget considerations are critical, especially for small businesses with limited capital. Low monthly payments are often more appealing to cash-strapped businesses than an upfront lump sum.

Brokers can play a key part in matching small businesses with the right finance for their business and the most recent data from the British Vehicle Rental and Leasing Association reported that leasing brokers’ combined car and van volumes grew by 11% since the end of 2015.

Hire purchase vs finance lease The FLA announced recently that UK consumers are turning their back on hire purchase and instead choosing to lease their vehicles, with hire purchase falling in value by 15% in 2016. It’s likely that this trend will be reflected in small businesses’ purchasing habits.

With hire purchase, the monthly repayments tend to be much higher and the customer doesn’t have the option of spreading the VAT across the length of the contract. For

The right finance can overcome cost objections and help build better, longerlasting relationships between customers, dealers and brokers. Boosting small businesses is key to boosting the wider economy. According to the Federation of Small Businesses’ estimates for 2016, SMEs accounted for approximately 99% of all private sector businesses in the UK, and generated a huge 47% of all private sector turnover. Leasing can help these businesses access the assets they need to succeed, and it’s likely that demand for flexible finance will continue to grow within this market.

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.

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.

01738 (1)

The latest figures from the Finance & Leasing Association (FLA) revealed that asset finance deals – comprised primarily of leasing and hire purchase – grew by 5% in 2016.

BRIDGING FINANCE OPINION & COMMENTARY

What’s driving asset finance growth?

Tristan Watkins CEO BNP Paribas Leasing Solutions UK

Online bridging valuations in an instant

This is the sixth consecutive year of growth and much of it was driven by new business in the commercial vehicle sector, which increased by 7% in 2016.

In today’s uncertain economy, small businesses – such as plumbers and delivery companies – are under increased pressure to stay competitive in a fast-moving market, yet many don’t have the funds to purchase essential business equipment upfront. As a result, commercial vehicle finance is proving an increasingly popular route for small businesses looking to replace or upgrade their vans, rather than an upfront purchase.

Growth drivers According to the Society of Motor Manufacturers and Traders, more vans are hitting the road in Britain than ever before, driving the demand for finance. A record number of vans and pick-ups were registered in 2016, totalling 375,687 and marking the fourth consecutive year of growth.

The ecommerce boom is one factor behind this, leading to ever larger numbers of vehicles on the road. Changing shopping habits – combined with increased consumer expectations around next-day and even same-day delivery – mean that delivery companies are looking to expand their fleets.

The UK ecommerce market is the biggest in Europe, and the third strongest worldwide. So far this year, UK ecommerce sales rose 12% year-on-year in January, suggesting that the sector’s success is set to continue despite concerns over the devaluation of the pound.

50 | NACFB Magazine

Another factor in play is the increased number of people setting up their own businesses, particularly builders and related trades. These self-employed sole traders are behind increased demand for new vans and, given tight budgets and cash flow worries, they are even more likely to look to finance to help them obtain the best van for their business.

those that aren’t VAT-registered, this cost can be prohibitive. A finance lease on the other hand has a low upfront cost as it allows small businesses to spread the cost of the VAT. This is a significant benefit for non-VAT registered businesses allowing them to set aside valuable cash reserves for essential investment in order to make money or expand operations.

Finance channels Most businesses secure finance directly, according to the FLA, while sales finance through a dealer or reseller is the second most popular channel. However, more and more businesses are turning to brokers to introduce them to the right finance, with a 10% increase in this channel in 2016.

Budget concerns Ultimately, budget considerations are critical, especially for small businesses with limited capital. Low monthly payments are often more appealing to cash-strapped businesses than an upfront lump sum.

Brokers can play a key part in matching small businesses with the right finance for their business and the most recent data from the British Vehicle Rental and Leasing Association reported that leasing brokers’ combined car and van volumes grew by 11% since the end of 2015.

Hire purchase vs finance lease The FLA announced recently that UK consumers are turning their back on hire purchase and instead choosing to lease their vehicles, with hire purchase falling in value by 15% in 2016. It’s likely that this trend will be reflected in small businesses’ purchasing habits.

With hire purchase, the monthly repayments tend to be much higher and the customer doesn’t have the option of spreading the VAT across the length of the contract. For

The right finance can overcome cost objections and help build better, longerlasting relationships between customers, dealers and brokers. Boosting small businesses is key to boosting the wider economy. According to the Federation of Small Businesses’ estimates for 2016, SMEs accounted for approximately 99% of all private sector businesses in the UK, and generated a huge 47% of all private sector turnover. Leasing can help these businesses access the assets they need to succeed, and it’s likely that demand for flexible finance will continue to grow within this market.

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.

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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.

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The latest figures from the Finance & Leasing Association (FLA) revealed that asset finance deals – comprised primarily of leasing and hire purchase – grew by 5% in 2016.

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