THE RETURN OF THE SLOW NO!
It is certainly interesting times in the UK and Ireland given the backdrop of BREXIT and the "will we, won't we" leave the EU on 31st October 2019. There is no doubt, the result of the referendum three years ago, has done quite bit of harm not only to our economies but also it has been an incredibly divisive subject right across these islands.
In relation to the funding markets the observation I would make is that certainly the credit teams of anyone lending money right now have tightened up their criteria, and the process to actually get a loan over the line can become quite cumbersome and frustrating at times. However there is one other development I have noticed over the last few months and that relates to funders issuing heads of terms / facility letters, which they claim to be credit approved, for then only to tell you that the bank or the lender has now no appetite to do the lend. This can be catastrophic for the customer and it's business, particularly when there has been no negativity right up to the SLOW NO at the end.
The thing is, everybody you meet is trying to sell you something, for me its money and debt solutions, for you it is maybe something else. I am someone who immersed myself in personal development over 15 years ago and I take great pride in my work and my ability to solve problems, build relationships and get deals done. One of the challenges facing our funding business right now is when our funding partners decide at the last minute to pull an offer, which causes a huge amount of anxiety right through the connection. In the last twelve months this has happened maybe half a dozen times, and it's certainly not a very nice experience.
Business is about solutions and the nice thing about our lending business given the fact we have over 50 lenders now on our panel, is that if one of our funding partners pulls their offer, we will normally have someone else we can slot in, who will be happy to perform. The result of this however is that we will naturally gravitate as a business to those lenders who do what it says on the tin, and follow through on their commitments.
I think this might be one of the more important blogs I write this year and share on LINKEDIN. There are many people out there who are willing to promise you the moon and the stars, and in relation to borrowing money, happy to send you a term sheet, to get you on board and committed. Unfortunately given where we are right now with regards to some of the headwinds we are facing into, there are some banks and alternative lending platforms who are issuing term sheets and then pulling the offers at the last minute. Yes I understand this happens and at times it is unavoidable if something crops up that maybe the lender was not aware of and now uncomfortable with, however I also know that sometimes these experiences can be avoided if the people you engage with are more upfront about the process and more importantly how likely it is the lend will actually get done.
As a business owner there are ways to mitigate this risk, one being to only speak to those lenders and providers who you know and are certain will definitely do the business. In the last three years we have facilitated more than £40M of new loans right across the business sectors and our source of funds has came mostly from the Alternative lending community. In the last twelve months we have started to do more with the high street banks again, but their appetite can be quite low at times, more cautious, and the process to actually get the money can be incredibly slow and frustrating. Therein lies an opportunity in itself for the high street banks, but I'm still not convinced their balance sheets are in an overly health state at present,
I am really interested as we approach quarter 3 and 4 of 2019, to grow my network. I want to work with good solid business owners who I can assist either with debt solutions or funding requirements. For any funders who issue term sheets and then don't follow through on their commitments, then I suggest you are going to struggle in this market, as word travels fast and there is currently plenty of funding out there looking for a home,
If I can help you in any way in relation to any of this, please reach out to me. I will be more than delighted to assist, and we have a huge amount of funding at our disposal right now looking for a home.
Conor Devine MRICS