Drawbridge Finance: Six months later are they still on top?

Drawbridge Finance: Six months later are they still on top?




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Rebecca Hobson speaks to Jonathan Samuels and Mark Posniak of Drawbridge Finance

Six months ago Drawbridge Finance ‘launched’. It opened its arms – and its deals – to 35 exclusive key partners, introduced a new product range, threw a lavish party and announced those eight-figure loans.

Having been open for business since April 2009, the ‘launch’ was of course more of a statement; the short and medium term lender had in fact already lent over £100 million. The March 2010 launch date was a turning point, a belated arrival; a chance for CEO Jonathan Samuels to start shouting.

Fast forward six months, and they’re ready to shout again; announcing record breaking figures for AIPs received in August, looking to recruit and are even considering opening their doors to work directly with brokers.

Dressed casually in true ‘dress down Friday’ fashion, it’s slightly flustered Jonathan that greets me. “You think Fridays are going to be relaxed, but they’re not – they’re manic! Deals go on Fridays,” he tells me as we sit down in one of the several boardrooms. Octopus Investments, an investment company that specialise in managing VCTs and PEs funds, is Drawbridge’s main funding line. The firm recently moved offices from Moorgate to the Old Bailey, taking Drawbridge with them.

That Octopus fund Drawbridge is what makes the difference, Jonathan tells me. “We’re not restricted by banks; we can be flexible in our lending criteria, we want to lend.”

There is, of course, little speculation around this; Drawbridge’s ‘appetite’ to lend is no secret. That they can and have funded a £24 million deal and a £17 million deal within a few months of each other has been much talked about.

It is, rather, the extent to which they are lending and their current business model – independent brokers must go through one of their 45 partners – that have set tongues wagging most recently.

The lending is sustainable, they tell me; the loan book stands “in excess of £70 million” (it started at £25 million), they have a “funding mandate where ultimately [Jonathan has] the call”. Currently, Octopus has £2 billion worth of funds under management – they’re not going to run out, they assure me, smiling.

As for opening their doors to brokers direct, they’re considering it.

“It’s not a no nor a yes. We like our model but want to bolster it, we want to push our relationships, we want to complete more deals,” explains Jonathan, and this is why they are recruiting.

Mark Posniak, head of marketing and sales, expands further on this; Drawbridge will always consider an independent broker, he tells me, provided that he’s a bridging expert who understands their criteria. “We have key partners and small brokerages who are specialists in bridging, who we take business from directly. A broker who comes to us who is an expert and understands bridging, and understands our criteria, we will listen to. We have also just become patrons of the NACFB and will now be accepting business direct from NACFB members too.”

And what about the criticism that Drawbridge only consider massive deals, that they won’t even look at something as low as £50,000?

This, they say, is entirely untrue and is exactly what their competitors would like people to believe. Yes they are still doing the larger deals, but they will still lend on £50,000 deals – they want to lend pure and simple – “We look at why can we and not why can’t we. There are lenders out there who think why we can’t, and that’s the difference,” says Mark.

“In any month you’ve got a lot of deals that are below the £300,000 mark, but at the same time, proportionally, we are doing a hell of a lot more above that £300k mark, even above the £1 million mark, than our competitors are doing.”

Later they tell me that, that Friday morning alone, they had “received four fully packaged deals” on their desk.

As for the BTL product launched in March, it has been “very successful” and is “right on the market”, where the high street has contracted Drawbridge has expanded, says Jonathan – and again they believe it’s “their honest and flexible approach” that has allowed this.

So what’s next for them then? And do they consider themselves the market leaders?

“We’re getting there,” says Mark smiling. “I do believe we have the best people in the industry, bar none. You’re only as strong as your weakest link, and our link is pretty strong, so the challenge now is recruiting.”

Drawbridge is looking to expand its team to take on four more bridging specialists, so as to maintain its “can do” attitude. The team is clearly determined to accelerate the current pace of lending and to keep funding ‘interesting’ deals –recently they lent against a private aircraft hangar at Luton Airport.

“In truth, if you had asked me the last time we met, ‘would we lend on aircraft hangar?’ I would have said ‘no way,’” says Jonathan. “But we took a look at it and actually, when you consider all the factors, the hanger has an intrinsic value that can’t go down.” The aircraft hangar referred to is based at Luton – the only London airport with no time restrictions for flying – building around the airport is heavily restricted, the opportunity to build any more hangars highly limited, all key factors considered when they examined the deal.

“We try and make deals work,” says Mark. “If you’d asked me before, ‘Do you lend on land with planning?’ I would once have said ‘no way’! Last month I completed £3 million worth of planning deals.”

As for recruiting, both Jonathan and Mark appear confident they’ll find the right people. “Quality people are attracted to quality, they’re attracted to people like us, we pay out on deals; we are where the action is.” Mark smiles.

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