New bridging lender Ronoco aims to lend £30m this year

Newly established bridging lender Ronoco seeks to provide flexible loans across the living, commercial and alternative sectors.

Backed by construction and property development company O’Shea, Ronoco is supported by over 55 years of experience in land acquisition, planning, construction, and development.  

The new finance provider aims to utilise this knowledge by looking at lending opportunities from “a different perspective” to the majority of bank- or institutionally-funded lenders in the market.

Ronoco was built out of an existing frustration with the overcomplication of the bridging lending process felt by director Mark O’Connor (pictured above). 

Having previously worked at JLL, Mark explained that the idea for the business came from the understanding that experienced lenders made the borrowing process more straightforward.

“There is no more understanding or experienced lender than one who has done it all before as the borrower,” said Mark. 

Over the past three years, O’Shea and its investment partners have deployed over £100m in the bridging market. 

Ronoco was launched to enable this group of investors to access more bridging opportunities and have a “direct face” in the sector. 

“Before launching Ronoco, we were surprised by the amount of business we received direct and are now excited to bring our offering to the market and meet more brokers and borrowers who we can work with,” added Mark.

He highlighted that it was the private and internal funding supported by O’Shea that differentiated Ronoco from other lenders. 

With O’Shea’s balance sheet being the main investor behind its loans, Ronoco can leverage off its strong cash reserves and investment partners.

This enables Ronoco to make quick decisions through its “non-rigorous approvals process”.

Consequently, the lender hopes to create a more efficient experience for borrowers that removes drawn-out processes. 

Hoping to build upon the existing connections established by O’Shea, Ronoco has made clear it plans to build new relationships with brokers.

According to Mark, new prospects for property development have emerged as a result of the pandemic.

He stated that Covid-19 has caused an increase in redevelopment opportunities as a reflection of a great shift in the nation’s living and working preferences. 

“Repurposed buildings provide attractive security for lenders with both a hope value and a discounted existing-use value to fall back on,” he shared.

Ronoco is targeting to lend £30m in bridging finance over the next year to fund such redevelopment projects across Southern England and London.

Mark pointed towards an evolution in consumer habits towards online shopping creating an opening for redevelopment in town centre retail. 

He predicts increased demand among the secondary commuter belt housing market, as a consequence of workers now travelling less and more greatly valuing outdoor space.

In addition, there have been notable issues in property development during the pandemic, relating to material and labour shortages, problems that are expected to continue throughout the coming year. 

“Contractors can only absorb this to some extent before passing on these costs," Mark claimed.

“This has been a problem for developers and investors who see their profit eroded by these costs and, more frequently, even struggle to find someone to build their project.”

This is why Mark emphasises the importance of lenders understanding real estate.

“There [are] always new lenders entering the market to chase the returns but with little understanding of the asset,” he commented.

“Working with experienced lenders makes for a more straightforward process and gives borrowers peace of mind. 

“There’s no more understanding or experienced lender than one that has done it all before as the borrower, and that’s why I believe the proposition for Ronoco will be so well received by the market.”

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