Are banks dead from the neck up? - The Commercial View

Are banks dead from the neck up? - The Commercial View


In a new monthly feature, Jonathan Rubins of commercial lender Alternative Bridging Finance gives us his take on what’s happening in the current commercial markets...


I have decided to stop reading the Sunday Times quite so avidly, what with all the blinding statistics and reports from think-tanks and monetary committees foretelling doom – it’s enough to put me off my roast.


What is abundantly clear is that right across the board, “stagnation” is the operative word, with banks reluctant to lend to even the most established of clients. 


Even when they do finally offer terms, the list of restrictions and pre-conditions is longer than Mariah Carey’s dressing-room demands.


Despite economists reporting “near stabilisation” in net lending, the head of statistics at the British Bankers Association recently admitted: “It does not materially ease concerns that on-going tight credit conditions are still a significant obstacle to economic activity”. 


So what are the banks up to? Well, if the brokers’ and borrowers’ recent experiences are anything to go by, most lenders are concentrating on re-financing expired facilities or haranguing existing customers to reduce LTV’s and increase margins and fees. 


Frankly, like the weather, it’s cold out there, with little sign of a thaw. 


So what is a broker to do? MBE certainly proved that the market we operate in is nothing if not inventive and although a wave of new lenders has appeared promising the world, they are mainly concentrating on residential property and doing little commercial business that isn’t buy-to-let.


However, demand for commercial property finance remains, and if our November completions are anything to go by, a restaurant, a hotel, a parade of shops and more, the High Street banks aren’t helping either the business community or the property industry.


From our perspective, all of the loans we recently completed were to credit-worthy borrowers, all of whom borrowed from us whereas in former times they would have relied on their clearing banks.


We all have our eyes peeled to see who arrives first into the re-finance market and, while we do, we are continuing to make hay even when there is snow on the ground!


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