An interview with PBL: Due diligence for developments is becoming 'more involved'



In a filmed interview with DFT, Pilcher Group directors Martin Simons and Simon Pilcher discuss why lenders are asking more questions when it comes to funding property developments, how an SME developer can grow sustainably, and where the responsibility lies for ESG in the built environment.

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The long-standing family business has two offerings, acting as both a brokerage, Pilcher Brokerage Limited (PBL), and long-term adviser for SME clients in the development finance market.

PBL — which has access to more than 200 debt lenders and arranges facilities from £250,000 to £50m-plus — works in the development, acquisition, bridging and investment finance markets, in addition to asset/portfolio refinancing.

The brokerage assesses schemes, defines structures and secures funding.

According to Martin, the due diligence requirements for clients and their development schemes are becoming more involved.

“Clients who come to us who haven’t built anything for 10 years are going to find it a very rude awakening,” he said.

“Lenders that are worth their salt, and the type we are going to advise our clients to utilise and partner with on schemes, are going to ask a lot of questions, and one of our roles is to ensure we precursor that to the client saying, ‘This is what you’re going to get asked.’”

Simon (pictured above) stated that the increased need for detail comes back to the lenders’ internal reporting structures on the capital they are lending.

“The demarcation of capital that’s being lent in development finance is a higher risk zone, and so they have to account for that in their weightings when it comes to deploying capital.”

One of the group’s USPs is that it tracks who is backing development finance lender entrants.

“We are checking the mandates behind the finance, and then when we see who’s capitalised who and why, we then know what the likely quantums are, what type of client is most likely to suit them, and what sort of schemes and geographies [they work in],” Simon added.

The full interview, which discusses MMC and the changing landscape of the development finance market, can be viewed below.



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