Onside Issue 6 - 38

Seneca Bridging

Building Bridges
Building for the future with Seneca Bridging
It's an exciting time for Seneca to be involved in
funding property development. The detail around
financing and releasing land for the development
of 300,000 new homes a year took up a large
chunk of the Chancellor's 2017 Autumn Statement,
underlining just how important this issue is.
Responding to this opportunity, we've recently
refined our development finance offering. We
now have a very strong proposition for the small
to medium-sized developer wishing to borrow
anything from £0.5 million to £2 million. Following
an initial deployment of our new product mix
at the end of the year, we received excellent
feedback from the intermediary market and we're
presently very busy exploring and underwriting
new opportunities. However, as with every loan,
understanding how we get repaid and assessing
the risk of that is not just critical for us, it's critical
for our borrowers.

Assessing a lending opportunity
When a new enquiry is presented, the first
action point is to look closely at the developers
themselves. What's their history? What do they
know? Who are they? Then the next step will be
to consider the site and location. As a relationship
manager, I study a lot of property data so one
starts to get a feel for the viability of a site in the
very early stages of assessment.

Once I've extrapolated the key financials, I'll run a
funding appraisal and, if it meets our criteria, I'll start
to get into the detail and ask a number of questions,
such as who makes up the project team? What's the
level of internal spec being proposed? How much
demand is there for these types of units in the local
market? What macro forces such as the quality of
nearby schools, workplaces and transport links are
relevant? And critically, if the new units don't sell
as anticipated, what's the minimum margin the
developer desires, and what's the back-up plan?
We'll always meet our customers as quickly as
possible to better understand their site, their
borrowing needs, and again, to help us mitigate
risk. We're supported by a panel of valuers,
surveyors, project managers and lawyers who
form an integral part of the due diligence and risk
mitigation process. There are a lot of questions for
our borrowers in the initial stages of a loan, but
getting into the detail early always helps flush out
issues that could become problems down the line
if they're not dealt with satisfactorily.
Ultimately, the whole Seneca Bridging team are
'property people'. We love visiting sites, watching
the progress of developments and seeing our funds
deployed - not just to build 'units', but to build 'homes'.
As long as we're working hard with borrowers to
mitigate risk in a project's infancy and through its
lifecycle, homebuilding should continue to prove an
attractive market for Seneca, our investors and our
customers for the foreseeable future.

Jeff Morton

Paul Fitzsimmons
Director, Seneca Property
Relationship Manager

E paul.fitzsimmons@senecabridging.co.uk

T 07392 879 281


Table of Contents for the Digital Edition of Onside Issue 6

Onside Issue 6 - Cover1
Onside Issue 6 - Cover2
Onside Issue 6 - Contents
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