Be kind. Stay Calm
By Mark Harrison -
This last 10 months or so have been really difficult.
People losing their jobs, being furloughed or at the very least, keeping their jobs but not knowing what the future will hold for them and their family and/or friends.
It’s been tough, mentally and emotionally draining and that’s before you look at the financial impact on people.
Here at Stretton Capital we have been fortunate and we know it.
We are grateful to our founders that they made the decision to carry on lending and not furlough any staff, nor did anyone lose their jobs, a decision made easier by how lean we run our business.
When other lenders pulled out of the market during the first lockdown it undoubtably had an impact on brokers. Their access to short term lending products became narrower and many of the lenders that stayed lending (ourselves included), changed their lending criteria.
We reduced our LTVs across the board and whilst we didn’t expect to rip up any trees during this lockdown period, we were still able to get money out of the door on some sensible property transactions and we know our core broker base were grateful to us for still supporting them.
Fortunately, we were able to revert to our standard LTVs pretty rapidly and those lenders that exited (or most of them) have come back into the market.
The upshot is that we feel grateful and fortunate and the shift in our mindset post that first lockdown is that we endeavour to treat everyone with respect and stay calm regardless of how difficult a situation may be.
It’s not easy saying no to someone and like every lender, we want to lend money. It’s what we are here for.
Our view is that it is nothing personal, it’s just business but one thing we pride ourselves on is that if we can’t offer on a loan application, we remain professional and courteous in declining.
We know and understand that brokers get frustrated and we know the impact it will have on their income if we and every other lender says no to their deal.
However, sometimes, a deal simply doesn’t work and if every lender had the same lending criteria or asset class preference, that wouldn’t work either.
We are all different.
We have brokers who love what we do. Some of the largest in the UK as well as some small specialist brokers. We also have brokers who would never use us and the point is this; Every broker has their favourites and that is absolutely fine and how it should be.
You cannot be all things to all men (or women).
Nasty Old Lenders
Lenders get a lot of bad press, especially on social media.
We have seen posts recently where property developers and brokers have called out lenders for charging non-utilisation fees on development deals, setting up their own brokerages in competition with the very people they are getting business from, charging higher than average default fees, using 90 or 180 day valuations instead of OMV.
None of which we do but that’s not important. Every lender should have the right to do whatever is right for their business because if they don’t, they may not be in business much longer.
The fact is that lenders don’t set out to upset anyone and let’s face it, life is much easier if we all get on.
Things are tough. They may get tougher but the key is to try and face these problems together, calmly and treat everyone with respect, kindness and humility.
We know just how fortunate we are here to work with some excellent brokers. If we can’t do a loan, they move on and place it elsewhere. None of us fall out with each other and nor will it preclude us from working together on the next deal.
As a final example of this, we are completing a £4.7m development loan this week that was first introduced to us back in September.
The word stressful doesn’t do justice to how hard this has been.
- Below Market Value (BMV) purchase
- 100% of Purchase Price
- Buying from one company and transferring into another
- Refurbishment of 2 properties
- Construction of 2 ground up industrial units
- Negative balance sheet of the main trading company on whom the debenture will be on
Yet despite all this (and some very difficult conversations), the broker we are working with has remained calm and respectful, as have we and ultimately, this calm approach has got us to where we needed to be…At completion stage.
He is a professional, experienced finance professional and his positive interactions with us have made life far easier than it could have been with someone less experienced. He has also used us numerous times previously so we know how each of us works.
We are fortunate that we have a lot of similar brokers, people whose mantra during these difficult and trying times is the same as ours:
Be kind. Stay calm.
Mark Harrison is Director of Business Development at Stretton Capital, a privately funded principal lender offering bridging and development finance up to £5m on residential, commercial, industrial and agricultural security in England and Wales.