The very best of 10 Questions

The very best of 10 Questions



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Some two years ago, B&C began exposing the hidden mysteries of the bridging and commercial world by probing the inner thoughts of industry insiders, quizzing just about everyone from well-seasoned pros to fresh faced newcomers.

Since beginning its weekly ’10 Questions…’ exploration into the industry cupboard, B&C has unearthed some rather interesting skeletons. We have been honoured to exclusively announce Mark Posniak’s love of chick flicks, Richard Deacon’s crush on Kirsty Allsop, Jonathan Rubins’ secret devil tattoo and Simon Ismail’s hippy band ‘Winston’, to name but a few.

And so, after coming to terms with a lack of talent to become the next footballing champion or failing to perfect the art of winning the Euromillions, many rolled the career dice and turned to bridging and commercial finance to try their luck. Most never looked back – except momentarily Ian Broadbent, MD of Blue Sky Mortgages, who declared: “I would love to be a bum”, if he wasn’t working as a lender.

Summarising his own challenges when finding his career path, Simon Allen, of Total Business Finance, offered particular insight into his own very difficult choice. “I wanted to be either a journalist or military policeman”, he said.

“I couldn’t make the decision between the pub and shouting at people so I went into banking with Williams & Glyns.” (We’re not sure the former perception is quite right, Simon!)

A renewed positivity

Despite Graham’s Allen’s “slow crawl out of the dung heap” predictions of the specialist sector back in April 2010, positivity appears to be growing amongst those we have recently spoke to.

Setting the tone for the year ahead, long-standing financial professional but relative ‘newbie’ to bridging, Bob Sturges, Head of Communications at Omni Capital, said: “I was immediately struck by the vibrancy of the sector and the interest it’s generating.”

Summarising the views of the industry, Bob told us about what he expects from the next 12 months: “Increased competition will encourage greater transparency and lead to better product and process design. Inevitably, some of the more opportunistic entrants will fall away. I expect regulation and TCF (‘Treating Customers Fairly’) to become key considerations.”

Specialist packager Danny Waters, CEO of Enterprise Finance, also gave his perspective: “Distribution is more valuable for lenders again; I believe that lenders who were trading prior to the crunch, and continue to trade, have resolved a lot of their legacy issues, stability has returned to the property market, which allows them to lend with less fear and more understanding of the value of the asset.”

The entire industry, from lenders to packagers and associations, all shared encouraging sentiments. However, Eugene Esterkin, CEO of Affirmative Finance Limited, offered a much more tempered outlook: “The only trend I’ve noticed is that there is no trend. The market is too unstable, too unreliable, banks won’t make decisions and each time we think a constant is emerging it becomes reversed.”

However, he did agree that more people moving into the industry is ultimately a good thing, with more moving into bridging in the last 12 months than in the previous two years.

Eugene continued: “For every new lender there seems to be also a failure, so the market is remaining constant – as one leaves a new one comes in. Their arrival is good, it’s good to have competition, it drives forward quality and efficiency and provides more choice for the consumer.”

Predictions

Richard Deacon, Sales and Marketing Director at Masthaven, suggested the emphasis during 2012 will be on new lenders entering the market. He explained: “More players will come into the market, we’ve seen new players come in and we’ve watched Mathon and Excel go out, but I think the emphasis will soon be on people coming in rather than going out...”

And, true to form, these predictions have materialised with the emergence of a plethora of new lenders and intermediaries venturing into the sector.

However, new entrants are being met with a rather lukewarm reception from the existing community, who don’t appear to be threatened by more competition. “New lenders? It’s always been like that, they pop up and then disappear,” Daniel Hertz, Director of Commercial Acceptances, commented.

Similarly, whilst Ian Broadbent notes the rise in new lenders he also raises additional concerns: “There has definitely been a growth in the number of lenders around, but they’re all very much accumulating around a small area in the market which is larger, first charge, non-regulated contracts. This means there is a real void for clients who are looking for a contract that may be FSA or CCA regulated.

“These changes are a benefit to us, as we look to fill those niches that other lenders aren’t supplying, but from a client’s perspective, the regulation is restricting opportunities to obtain suitable bridging finance – and this is a huge issue.”

The negatives

Echoing the concerns raised by Ian back in 2010, Ray Cohen told us that regulation is the worst thing about his job… seemingly a little odd for a compliance expert! He said: “Some regulatory requirements increase the cost to the consumer without any extra benefit to them. After all, you can’t regulate out the crooks. People who want to fiddle money out of the gullible don't worry about the rules, ask any convict!

“I think the FSA overreacted to the credit crunch and in some areas are trying to use a sledgehammer to crack a nut. The risk from a small specialised lender is not the same as the banks gambling millions on markets and securities that they didn't understand.

“New entrants are both good and bad. Too much money and there’s too much pressure to lend. A few years ago when Quickbridge entered the market offering a very high LTV – higher than anyone else – everyone thought they wouldn’t survive but they did (for a while anyway) and that pushed up LTV rates everywhere. But I don’t think that will happen again.”

And, further suggesting the future may not be so rosy, Andrew Curry of Aldermore said: “Unless something dramatic happens to the economy within the next 12 months then, regrettably, I see little change within the industry.”

Graham Allan, MD of Commercial Money Matters, summarised the difficulties in his word of warning to new players in the market: “Don’t do it! There’s not enough to go around as it is!”

Yet despite the potentially bleak outlook, there is an overall sense that the industry is on the up and no one would rather be anywhere else, making for a core of steadfast professionals who are prepared to ride out the storms.

Leaving us with a lasting thought, Terry Pritchard, Owner of PWF Corporate Finance, offered his advice for introducers and lenders: “The biggest problem for brokers is that we’re all lazy buggers, we’d much rather be down the pub, but you need to keep ahead of the game.”

“As for lenders, be cautious but not negative about your lending, again keep your costs down as much as possible, and be careful... the FSA almost over-regulates these days. There are lots of ways to lend and make money, but you must know your market place and stick to your model.”

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