Game of Loans:

Game of Loans:

Since the property market has emerged from the dark recesses of 2008 we have seen an upturn in applications from clients and prospective property developers .

Since the property market has emerged from the dark recesses of 2008 we have seen an upturn in applications from clients or prospective property developers that in effect, aren’t really property developers. Having watched a good 40 minutes of Sarah Beeny and had a good rummage around for some tools, these ‘inexperienced’ clients seem to be emerging in their droves.

We occasionally find hints of frustration from brokers that can’t understand why we won’t lend to an accountant with no development or on-site experience, building a large detached house in their garden, even though they have an agreed JCT contract in place with their builder.

Turning the experience question on its head, this is a lesson we have learnt down the years. Previously we agreed deals to those lacking in relevant experience on the premise that they were taking on a good project and had a builder contractually tied in. For starters, these contracts don’t always stack up and are often littered with loopholes that would allow the builder to walk off site, with a very nice but part built large detached house in the garden. Our experience has taught us that development projects are most successful when everyone’s interests are aligned – the developer, builder, lender et al all want the project to be up and exited quickly.

But what to do with this good pool of potential business?

The real success stories have been where we have been approached by clients that fall into a grey area with some previous experience of say, converting a single unit into two, but not enough to wriggle through a high street bank’s ‘computer says no’ underwriting system. The point of commercial finance is that we want people’s businesses to grow. We want them to be able to take that larger step forward that allows them to move from converting a house into flats, and then onto building a single unit and so forth.  Amongst other things that makes great repeat business.

Likewise we have formulated a scheme that teams up non-experienced clients with experienced developers, finding a solution to this problem. As a result we have seen some excellent projects where the accountant’s builder has become a party to the loan and we have lent to them as a partnership – computer says yes! Our experience has taught us this is a better way of doing things.


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    Lyle E Dennis

    I am looking for funding projects in West Africa countries of Ghana and Mali. Do forwarded details for development funding. Lyle E. Dennis

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