Shawbrook tops short term lending table

Shawbrook tops short term lending table


A recent market report, conducted by the Association of Bridging Professionals (AOBP), indicated that £46 million of bridging loans were lent from June to August this year. Shawbrook Bank featured at the top of the lending table with an 18.94 per cent stake of the total volume in the report.

Jason McGee-Abe spoke to Stephen Johnson, Managing Director of Commercial Mortgages at Shawbrook Bank, to get his views on the results and find out more about Shawbrook’s current short term proposition…

What do you make of the AOBP statistics and Shawbrook’s positioning?

The figures collated by the AOBP are extremely interesting. As a fairly new lender in the short term finance space we are delighted to appear at the top of the table whilst in our infancy. We have a very strong appetite to lend on a short term basis and feel like we have only just got off the ground. We are enthused to continue to build on this momentum and to feature as a leading lender of short term loans.

Given Shawbrook’s £8.7 million summer bridging figures, how strong is your short term proposition currently?

We are targeting experienced property investors with a high net worth and strong assets; a client profile that we currently support with our term loan lending. For this type of client we feel we have a market leading offer in terms of pricing and level of funding we can provide. Currently our rates range from 0.68 per cent per month for residential property, 0.77 per cent per month on mixed use and 0.83 per cent on commercial, we will lend up to 70 per cent LTV and have various interest servicing options.

What proportion of Shawbrook’s business is focused on bridging and commercial finance?

Currently we have four main lending divisions within the bank – secured loans, asset finance, consumer lending and commercial mortgage lending. In the commercial division we serve two key client groups; professional property investors and sector experienced trading businesses. We provide a whole range of solutions ranging from just 3 months to 30 year mortgage terms. We support investors with short term loans, medium term refurbishment products and traditional investment mortgages.

What short term products does Shawbrook offer?

Short term loans for acquisition; when a client wants to purchase a residential, mixed use or commercial property but needs to buy quickly in order to take advantage of a particular opportunity. Our product range will enable a borrower to obtain up to 70 per cent LTV over a three to 18 month term.

Short term loans for refurbishment; when an opportunity results from purchasing a property subject to completing some minor refurbishments ahead of sale or retaining long term for investment, we are able to lend up to 70 per cent LTV of the purchase price over a three to 12 month term on residential and mixed use property.

Why did Shawbrook launch its short term product?

Many of our current clients have used or would consider using short term finance to acquire a property and then look for a longer term lender. We considered that if we were willing to lend to these clients on a long term basis then why not assist with the initial funding as well. It was essential that when we bought a product to market the pricing and fee structure was competitive.

We have already seen that clients who take our short term loans have become repeat customers with the bank, not just on a short term basis but also with our longer term products too.

How is Shawbrook managing to differentiate itself in the marketplace?

Shawbrook is a new bank with no legacy issues from the credit crisis. Our funding is supported by our savings business and therefore we manage our own cost of funds and the ability to lend these funds to customers. In bridging there are often market participants with reliance upon other banks or institutions for funding. We are able to fund our lending directly, and in the short term loan market this enables us to set a new benchmark for pricing.

Sometimes it is easy to forget that the bank only entered the commercial lending market last spring, and I feel we have achieved a lot in that space of time. We are fortunate to have high quality and professional staff who truly understand the value and importance of the intermediary market. We are delighted with the foundations we have laid, but feel there is much we can improve upon. Hopefully with this attitude we will be able to continue to deliver for our intermediaries and their clients.

Shawbrook recently revamped its bridging and commercial mortgage product range, which was made available to a new panel of key strategic partners. With a strong emphasis on its ‘strategic partnerships’ and distributor relationships, the lender’s appearance as leader of the AOBP’s summer table indicates that this approach is bearing fruit in a big way.

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