Davenham name returns to lending
By Bridging Loan Directory -
Failed property finance firm Davenham has been reborn, returning to its roots as an asset-based lender.
A management team paid administrators £2.5m in November for the residual loan book and have now launched Davenham Asset Finance which offers small and medium-zised businesses loans of £5,000 to £500,000 secured against equipment and other assets.
Davenham Asset Finance, led by Paul Burke and Heather Robinson, has agreed a facility with new bank Shawbrook.
Mr Burke said: “The recent report from the Bank of England shows that net lending fell £300m in the first quarter of 2013. As a result we are launching at a time when borrowing through traditional methods continues to be difficult, creating a greater demand for fast and flexible alternative finance.
“In addition there is a need to revert to the old fashioned values of service and empathy, discussing people’s needs and doing your utmost to find a solution.
“Prior to Davenham plc’s demise, following the financial crisis and subsequent property crash, the group’s asset and trade finance divisions operated successfully. I am therefore confident that we can draw on that experience to re-enter both the asset-based lending and, in the very near future, trade finance markets and build a successful business.”
Stock market-listed Davenham had a significant exposure to the property sector and got into trouble when values plummetted following the 2008 financial crisis.
It went into administration in October 2011 leaving a syndicate of banks led by Royal Bank of Scotland facing a loss of nearly £64m. A small team stayed on, managing the loans and recouping payments for the firm’s creditors.
An April report from administrators Duff & Phelps said £21.6m had been returned to the lenders, including the sum paid by management, and administrators expect to collect a further £1.2m. “Overall, there will be insufficient realisations to pay the banking syndicate in full,” they said.