The Cheval Story
Cheval Bridging Finance entered the market in 1995 and became one of the first regulated bridging lenders in the industry.
The lender made the decision to wind down last year after it was unable to secure further funding from its existing principal source, Clydesdale Bank. This decision was as a result of the bank’s strategic review which saw Clydesdale’s parent company, National Australia Bank, reposition itself in the market.
By October/early November last year the lender realised that its Clydesdale facility would not be extended and talks to source new funding had not materialised by November/December 2012, so the shareholders decided to stop new business, with the last loan facilitated in December, make redundancies and start to wind down the firm.
Cheval relaunches after ABC buyout
Alternative Bridging purchased Cheval Commercial Finance, together with the Cheval name and trademarks, and launched its regulated products on Monday.
There was much interest in Cheval from existing bridging lenders and potential new start-up lenders. Alternative Bridging became aware that Cheval was looking for funding and made initial contact earlier this summer and by August a deal was agreed with the owners of Cheval.
Change of control was applied for and granted by the FCA in August, and Allan Kay has been appointed Managing Director of the acquired company.
Alternative Bridging initially scheduled to commence regulated lending in Q1 2014, so the announcement is many months ahead of schedule and coincides with its new website going live - www.alternativebridging.co.uk – and the introduction of its new image.
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Broker reaction
Kit Thompson, Director of Bridging & Commercial at Brightstar Financial, told B&C: “I was delighted to hear that Cheval had been acquired and that such a well-known and trusted brand would be returning to market, as one of the original regulated bridging lenders, albeit under the name of their new owners Alternative Bridging Corporation.
“I was also really pleased to hear that Allan Kay has been appointed Managing Director of the acquired company, as an active member of the astl and a well-respected, knowledgeable bridging, I am sure many will be pleased to see his ‘active’ return to the industry and he will prove a real asset to the existing strong team at Alternative Bridging.
“With their new regulated loan options, Alternative Bridging will offer a complete suite of bridging products and this is great news for the bridging sector.”
Dave Fathers, Head of Sales at Finance 4 Business, said: “Their new regulated products seem to sit nicely in the middle of the current market. There are some cheaper offerings for clients elsewhere but that being said, there are certainly more expensive options as well. It will be interesting to find out what the full interest rate scale is when, say, leveraging the max LTV against an asset outside of their prime parameters.
“It is good to hear that Alternative Bridging are happy with their place in the commercial market as it shows they are here to stay with the commitment in growing their brand and I do hope that the acquisition of Cheval takes them to new heights.”
“The golden egg in the basket was being an FCA regulated entity”, said Alex King, Executive Director at SPF Private Clients.
Alex added: “They’ve come into the market offering 95 basis points so it remains to be seen what the impact will be, but obviously it’s welcome news for Cheval to be back.
“In the current climate with a price war going on between Precise and United Trust Bank it’ll be interesting to see where they go on from here.
“More lenders in each space can only be good for one person, and that’s the consumer. Ultimately, the increase in competition in the regulated space will drive down prices, although I’m not sure how low rates will go they are getting closer towards mainstream rates.”
Andrew Hosford, Director of Voltaire Bridging, warned: “It makes sense to buy a firm that has all the regulation boxes ticked, but I would question the logic in associating with a lender that was seemingly going under.
“We do not deal with regulated mortgages at Voltaire Bridging, so there is no real benefit to us in Alternative Bridging buying Cheval. We have looked at a couple of deals with Alternative Bridging though and would hope that this move does not distract them from their core business.”
Dave added: “I believe that there are two key factors that will need to be pushed by them to give them a satisfactory place in the regulated bridging market. Firstly is obviously marketing, every broker needs to be aware of this renewed player in the market, secondly and more importantly, service and completion will need to be excellent. This should give brokers the comfort they need that when they are providing regulated loan facilities for their clients through Alternative Bridging, their needs will be met in a rapid manor, giving them the confidence that the potentially slightly more expensive deal is right for their clients if time is of the essence.
“It is exciting that there is now even more competition within the Bridging market. I am sure that Allan Kay will be a massive asset to this venture and I wish him and ABC great success now and in the times to come.”
Future
This acquisition is not only a strategic step forward for Alternative Bridging but a real statement of their intent to grow their brand. It’s also great to see that Cheval’s legacy will live on with this deal.
The new look Alternative Bridging will be represented at the upcoming FP Show on 6th November.
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