‘Working tirelessly to get the client their end goal’
By David Craik
Specialist Finance Centre (SFC) hopes joining the Bridging Loan Directory will help further accelerate its journey from kitchen table to top of the table in the broking industry.
Directly authorised by the Financial Conduct Authority in 2019, the broker offers specialist finance products such as 2nd charge mortgages, bridging and development finance, buy to let, and commercial finance to clients of financial intermediaries.
The firm as a concept was born in 2016 and set up in 2018 by managing director Daniel Yeo after a decade working in the sector. “I had always wanted to run my own business and be an employer,” he says.
“Regulation was really coming into force around then with the Mortgage Credit Directive. I wanted my company to be born out of this move to regulation. I wanted a fresh approach with no legacy issues.”
Yeo sat down with his wife Emma at their home kitchen table to find a name to go alongside this new ethos. As specialist finance was a buzz phrase at the time, Yeo says, SFC seemed a natural choice.
Over the last four years the group has grown from a two-man band – Yeo and now director of specialist lending lending Oliver Hembury – to 37 staff.
Of that number, 21 are directly employed by the group working as a master broker focused on regulated activities in its Cardiff headquarters.
They mainly take introductions from mortgage brokers and Independent Financial Advisers.
The remainder work in SFC Solo as self-employed advisors across England and Wales packaging mainly unregulated bridging and commercial business but still within the overall group structure.
In addition, a Scottish office – SFC Scotland concentrates on development finance.
“It was just me and Oliver for the first couple of years,” Yeo says. “When Covid came it brought on challenges such as lenders and products being withdrawn left, right and centre. But it gave us time to work out the direction of the company and the setting up of Solo in 2021.“
Whether directly employed or self-employed the founding principles of the group – integrity – ‘working with their interests at heart, not ours’, collaboration – ‘working pro-actively with all parties on the application, from the client to the end lender’, and determination – ‘working tirelessly to get the client their end goal’ – remain the same.
“I don’t like the term master broker, but I can’t think of a better one. But we are more than that because we are very advice focussed,” says Yeo.
“Financial applications can be tough sometimes, so we want to lay out the red carpet for our clients. We are a partner to them in that we offer services that they can’t do.
If they don’t have the resources or specialisms to do second charges or bridging, then we will be an extension of their business.
We also have a huge quality control team and do compliance checks throughout the case life cycle. We ensure clients feel supported and understand everything that is going on.”
SFC is also as careful on the other side of the coin – namely matching client needs with lenders products.
“Being whole of the market can be a dangerous place to be particularly with bridging, so we hand-pick a lending panel,” Yeo explains.
“We want to work with the lenders who are respected, have great products and great service and have proven to have delivered over time with solid funding lines in place.”
Yeo says Covid shone a light on those lenders who were not well supported by funders and who “did not have enough control in terms of mandates as to what they could and could not lend”.
“As a broker when you are working cases on behalf of introducers, you need to make sure that your bridging lenders are absolutely spot on,” Yeo states. “We have a preferred panel and a secondary panel across every product.
These are lenders who we have great relationships with and have proven to have delivered time and time again.”
That help is certainly needed at the moment with Yeo stating that despite the economy demand for bridging has ‘gone through the roof’.
SFC offers regulated and unregulated 1st and 2nd Charge bridging on residential, investment, commercial property and land.
Rates available in the market are from 0.4% with a typical rate being between 0.75% and 1% per month.
As its website states: “We focus on making sure entering a bridging loan is the correct advice for the client. Analysis of the exit rather than chasing a “deal” is more important to us.
Bridging is high-risk short-term lending for the lenders involved but also for the clients. Therefore, we reflect this in our approach before offering and recommending a product.”
Yeo adds: “Second charge has always been our lead product, but bridging is now on a par.
The typical scenario at the moment from our clients is someone looking to downsize and who needs a bridge to be taken more seriously by cautious estate agents, lenders and vendors.
We are also seeing bridging demand for chain breaking as well as non-regulated bridging as professional landlords and developers see opportunity not challenge in the property market.
They want to pick up those properties that were selling 10% higher this time last year. They are taking the long-term view.”
Its Scottish office is also seeing strong demand from professional developers.
“The less experienced are backing away but those more experienced see the opportunity. We market to the people who are active in the market,” says Yeo. “It is not a distressed property market, but it is volatile.”
Yeo says lenders are being more scrutinous at present looking for specialist property clients rather than those who have these services as an add-on to their core business.
“Lenders are expecting a lot more such as experience in the market and affordability with rates going up,” Yeo explains.
With introducers Yeo says a lot more are now realising that they have to diversify – given current high street lending criteria – into areas such as bridging.
“Again, if they can’t offer and arrange it themselves, they turn to someone like us,” he says.
Yeo hopes these strong market fundamentals and its own values will help drive further growth at the group. He says that if the business does not have 70 staff by the end of 2024 he will be ‘disappointed’.
“We brought in a dedicated recruitment director this February which really shows our ambition,” he says. “We are aggressively looking to grow Solo and our employed advisor team.”
Its SFC Academy will also have a continued role in bringing in new talent. Launched last May it takes on groups of five to six people and trains them in-house into specialist finance roles.
“We look for people actively looking for a career in this sector and nurture them in our incubated environment.
It is a part of the business we invest in heavily and it has been instrumental to our growth. In fact, we are now running out of office space here in Cardiff and may have to look for somewhere bigger,” Yeo says. “You can’t build a business long-term if you haven’t nurtured your own talent.
You can really ingrain your values in them, and they will help us meet our goal of being the biggest B2B specialist packager broker over the next few years.”
He believes that the Bridging Loan Directory can also play a crucial role in that mission.
“The Bridging Loan Directory is in line with our growth mindset. It is a great, very well trusted brand and has the perfect platform to push us further into the public eye,” he says.
“It will lead to higher brand awareness for the Specialist Finance Centre in traditional and social media and also shows to the market that we are serious players. We are here to help.”