<
p>A bridging lender has responded to the market and brokers by launching a £750,000 loan product.
Portman Finance has always tried to react to both the market and demand. In addition to this, Portman has endeavoured to regularly talk to, and more importantly, listen to what the commercial finance brokers are saying about the demand and needs of borrowers.
In previous years, when the recession hit, Portman Finance found a small niche in the market for small business loans. Small businesses were really struggling to find support from lenders at a time when cash flow was so vital. Portman Finance started providing small business loans but on a secured basis.
Stewart Barnes, Director of Portman Finance, commented: “We tried to focus on where the needs of the market where. We were seeing some very successful small business struggling to find support from the banks and Portman Finance tried to fill a very small part of the chasm that the banks had left. We tried to structure the small business loans around the business, for example allowing weekly capital reductions to suit the business’s cash flow. The loans would always need to be secured whether it was commercial or residential property, but what it gave is an alternative source of funding for businesses.”
Over the last 6 to 9 months Portman Finance has noted a positive shift in the marketplace and would hazard to suggest that confidence is growing as, hopefully, the country pulls itself out of the deepest and longest recession in living memory.
This confidence has manifested itself in the number and quality of enquiries it has recently seen. In addition Portman Finance has witnessed more dynamism and vitality in the property market; as well priced assets are changing hands more quickly than has been seen in the last 5 years.
Stewart added: “We have seen a lot of activity recently and the enquiries we are receiving from brokers are of a distinctly higher value than previously. We have therefore attempted to respond to the market with an increase in our maximum loan size; rising from £500,000 to £750,000. We will continue to look at first and second charges and also remain shy of offering “structured” products as we wish to maintain our ability to assist with the “odd” situations that brokers struggle to place elsewhere.
“For instance, we were recently presented with a deal where a borrower had been operating a business with weak accounts but with a very positive potential. The borrower was looking to consolidate his business into new premises and trade from there. The premises being purchased were mixed i.e. a shop with residential upper parts. He required 70 per cent LTV, which he originally asked for over a six-month term. All the ‘traditional’ lenders had declined to help the borrower due to the fact that it was a 70 per cent LTV and the accounts were so weak.
“We liked the deal; the weak accounts and high LTV didn’t scare us, however, we felt that six months was too short and reverted with an offer of the full 70 per cent but over a 2-year period factoring in capital reductions sufficient to reduce the loan to 60 per cent by expiry of the term. In this way we are enabling the purchase and allowing sufficient time to reduce the LTV to a more acceptable level and enabling the borrower to produce two years healthy accounts and demonstrate serviceability, which in turn would make it possible to refinance out on a long term conventional basis without being under pressure.”
A bridging lender has responded to the market and brokers by launching a £750,000 loan product
.
Leave a comment