The bank is gearing up to officially open in Q3 2022, once it receives its full banking licence without restrictions from the FCA and PRA.

It plans to enter the market with a competitive property development product, with accessible and bespoke loans.

“We will initially provide property development finance for both residential and commercial schemes, typically up to 24 months in duration, but we will consider longer terms where appropriate,” said Neil.

GB Bank will start off by offering development finance loans of between £500,00 and £5m, but will increase the maximum loan size as it grows.  

In addition, Neil said the Teesside-based bank is looking to offer additional products and services that meet property developers’ various needs, including buying their next site before the one they are working on is complete.

Investment mortgages for completed residential and commercial properties are also on the list of services borrowers can look forward to receiving from the bank.

Having received its authorisation with restrictions licence from the FCA and PRA in October 2021, GB Bank has ambitions to finance almost 20,000 homes and several million square feet of office space, supporting the creation of over 100,000 jobs, according to Neil. 

Filling the gaps 

An authentic relationship approach and the provision of flexible lending structures still seem to be lacking in the development finance industry, believes Neil.  

“With [many] lending decisions not being local and lending policies sometimes being rigid, developers are often all treated the same. 

“It is not unusual to hear of relationship managers of other funders travelling 100-plus miles to undertake a transaction and then drive home. This feels more like commoditised lending vs a local relationship-led one which GB Bank’s will be.”

With the company’s relationship managers based locally, customers can expect a quick and convenient service and more traditional methods of communicating.

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What’s more, the teams can deliver rapid and efficient responses when there is a problem, thanks to being familiar with the location sites. 

“This local approach is highly scalable and will ensure that we provide excellent turnaround times and tailored lending decisions, and will enable us to build long-term relationships with customers, brokers and other local professionals,” added the chief lending officer. 

Neil explained that the relationship managers are backed by a credit partner (underwriter), who will meet the developer, visit the site, and in effect, become part of the deal team alongside their relationship managers.

A bank with a purpose 

GB Bank is making it a priority to offer property development loans to businesses with an impressive positive social impact.

“We are dedicated to building and regenerating communities in underserved regions of the UK, and the driving force behind this is our people,” Neil commented. 

The business has been recruiting employees fit for the major roles needed during the launch. 

“Speaking to local authorities has provided us with valuable insight into a number of the challenges they face around regeneration and affordable housing, and we are keen to ensure we form part of the solution,” Neil said. 

While housing forms the majority of enquiries, the lender has a growing number of opportunities that support local rebuilding, affordable housing, and schemes that focus on social impact.

“We will be ideally placed to support the areas in which we are based, given our local knowledge and joined-up approach with our underwriting teams,” Neil said. 

Offering incentives for sustainable and zero carbon developments is also at the top of the bank’s list. 

Neil commented: “We are very keen to support sustainable developments, whether that be to lower carbon emissions or those that deliver positive social impact.”

Looking forward  

In 2023, Neil expects BG Bank to expand into a number of new geographical areas, and the model he has detailed ensures the bank can scale quickly and effectively across its preferred markets.

Plus, when it comes to proposition improvements, the bank will be frequently looking to develop and improve as it matures.

“We will also look to launch additional types of lending products that naturally sit alongside property development, while building a wider proposition to support property developers in other key areas of their lifecycles,” added Neil. 

The future of the property development market 

Neil thinks the speed and consistency of planning approvals and the additional costs of meeting ongoing regulatory changes remain a serious challenge.

He hopes both will be sorted out in the short to medium term.

 “While the rising cost base driven by inflation and interest rates is a concern and will be a negative drag in the short term, I can only see demand for housing and commercial projects increasing as the population continues to grow, employment remains high, and the government’s levelling up agenda is fully implemented,” Neil concluded.