Bridging lender

Are bridging lenders looking at international expansion?

A couple of weeks ago, Fiduciam announced that it planned to almost double its bridging loan volume in Spain in 2019.

The bridging lender’s systems enable multi-currency and multi-jurisdiction loans, which allows it to also access the loan markets in the Netherlands and France.

Last year, MFS expanded into Asia with the launch of its bridging services in Singapore.

MFS claimed that the establishment of its subsidiary Market Bridge Solutions was a result of growing borrower appetite in the region.

In the light of this activity in the sector, Bridging & Commercial spoke to a number of lenders to find out if they had any plans for international expansion.

Are lenders looking at international expansion?

“Our core focus is on growing our offering in the UK,” said Paul McFadyen, managing director at Glenhawk.

“However, as an entrepreneurial company, we are always looking at new opportunities across Europe and in the US.

“We have senior members of the team with experience specifically in the US, so this would naturally be an area of interest to us.

“Local knowledge is a crucial factor for us in expanding anywhere, whether it is in the UK or internationally; we are still very much in the researching and planning phase, but it is an exciting prospect for us.”

Stephen Burns, director at Adapt Finance, added that lenders tended to not offer the option for international bridging.

“There certainly is demand we could explore, but [we] need some products to offer first.”

Colin Sanders, CEO at Tuscan Capital, said its focus was resolutely on the domestic lending market.

“Tuscan Capital provides non-regulated bridging finance throughout England and Wales and we have no plans to extend this internationally.”

Could the market see a move to international bridging?

“Back in the immediate pre-credit crunch era, we saw a number of entrepreneurial specialist mortgage providers expand their offerings to parts of the continent,” added Colin.

“Spain was a favourite choice for obvious reasons, but other destinations included the likes of Italy, Poland and Hungary.

“I don’t recall there being many happy endings as a result of these ventures, and I don’t expect to see a surge of British bridging lenders looking to take the international market by storm anytime soon.

“Bridging is a specialist product for a niche market and requires skill and knowledge if it is to be done successfully.

“Some erstwhile UK lenders have, unfortunately, found the domestic market challenging enough.”

He explained that countries with their own peculiar attitudes to lending and borrowing, different regulatory and legal regimes, and probable language hurdles presented a challenge to a bridging lender.

Paul added: “Due to the various legal and regulatory constraints, we do not envisage many bridging lenders expanding their offering abroad.”

“At Glenhawk, we are in a fortunate position in that we have some international experience within the team together with some global funding partners.”

Jack Coombs, director at Aspen Bridging, concluded: “I think that the UK market is sufficient for now.

“International diversification requires a model of business which can be applied easily.

“Technology is the only answer and most firms are nowhere near having that capacity.”

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