‘Real products, real people, making real decisions’
By David Craik -
Stripping away the frippery of finance to focus on the needs of its clients has helped business boom at MS Lending. Now they are joining the Bridging Loan Directory.
Michael Stratton has no time for people in the bridging industry who try and impress clients with fancy financial jargon and dazzling finery.
“The general person on the street sees finance as being all suits and briefcases. The stiffness of corporate life,” says Stratton who set up Manchester based residential and commercial focused MS Lending in January this year.
“I’ve been there. I have been in a three-piece suit in previous roles during my 11 years in the specialist lending industry. But I wanted our new business to be relatable to people thinking of doing their first investment or purchase, and who didn’t want to be talked and potentially confused by a lot of financial mumbo-jumbo.”
Stratton stresses that this doesn’t mean MS Lending is casual either in dress or manner. There are no feet on the desks here.
“We just want our clients to feel comfortable when they walk in our door or pick up the phone. We don’t want them to be just another number,” he says.
“We try and make our marketing, social media and emails as user-friendly as possible. We have a simple and effective message and slogan. It is real products, real people, making real decisions.”
Stratton wanted MS Lending, which covers England, Wales and most recently Scotland, to stand out amongst its peers by developing a new niche service to clients and brokers.
“This is a very diluted market,” he says. “There are a lot of big players within the space. I didn’t want to become just another lender and swim in the same ponds as so many do. We thought long and hard about which part of the market I wanted us to sit at.”
He explains that at one end of the market there are the lenders who have got access to cheap money and engage in the ‘rate race to the bottom.’
“They are constantly trying to put the cheapest rate out there to win business,” he says. “At the other end you have the private lenders who are a bit more expensive but who can do things which a lot of the mainstream lenders can’t because of banking covenants.
I thought the niche was something that was very much in between the two. A lender who is able to do things that some of the more mainstream lenders aren’t able to do because their funding lines don’t allow them to but not be as expensive. It would mean that we would have a scalable business at the same time.”
It’s certainly growing with “massive demand” from clients far exceeding Stratton’s expectations. In August it lent out over £4million and Stratton says he want to be consistently hitting that number.
By 2023 he wants to be lending at least £5million a month.
“Our pipeline at the moment suggests that those figures are achievable,” he says. “We also aim to double the team to 8 people by the end of the first quarter next year.”
Demand has come from both residential and commercial customers with the stamp duty holidays fitting well with MS’s ability to be agile and to turn around projects quickly.
“We can do cases in 36 to 48 hours if speed is of the essence for a client,” Stratton says. “Semi-commercial is picking up again after the pandemic so there is growth there.
We also do a lot in the social housing space which will keep increasing as more investors buy property and then lease them to housing associations and councils.
The Government is investing a lot in this sector because there is a massive need to help homeless people and veterans’ rehabilitation.”
When it comes to lending Stratton stresses that every loan is individually underwritten. On residential purchases it offers up to 75%, HMOs up to 70% and semi-commercial up to 65%. It has a maximum loan size of £3million with no minimum. It offers rates from 0.95% per month.
“We are well ahead of where we thought we would be 10 months in,” he says. “I always wanted the business to grow organically.
There was some pressure to lend enough so it was a worthwhile venture but there was never the feeling that there a big chunk of money burning a hole in my pocket that I needed to get out. We were quite streamlined from the start.”
MS Lending’s habit of creating market first products has also helped such as ‘no valuation up to £500,000’.
“The no valuation product means that, depending on the size of the loan and asset we are able to lend without a full valuation. We do a lot of it,” explains Stratton.
“We saw a gap in the market where valuers face increasing pressure from Professional Indemnity coverage in the bridging sector.
This means that valuation costs and their turnaround time is increasing rapidly. This is the basis of what we try and do. We see problems and we try and mitigate them.”
That’s part of the group’s evolution, he explains.
“In the first 6 months we were more reactive. I have a number of contacts in my time in the industry and we were working off the business coming to us rather than new sourcing,” he says.
“But now we have seen that there is a real want and need for our product and offering in the marketplace, we are starting to be more proactive.
We are banging the drum and letting more people know who we are.”
That’s part of the reason it is thrilled about joining the Bridging Loan Directory. “It’s a publication that I have followed for a while now. It gets big coverage in the industry and will be ideal for us looking to build and push the brand,” Stratton says.
As well as expanding it is also about preserving the success the team has created to date.
“The battle we face as we grow is that we need to maintain all our USPs which are working so well. We are working a lot on redemptions at the moment trying to do that honestly, fairly and respectfully with our clients.
The back end of the process is what can trip you up,” Stratton says. “I guess this is the hard part of getting to the next level, but we like the challenge. I am excited how far we can take this.”
David Craik is a freelance journalist writing news, feature articles, blogs and guides for national newspapers and magazines. His main areas of interest include finance, property and investments.