Pension fund owned bridging lender, Fiduciam, is bucking the trend in the bridging market and lent over £9million in Easter week alone. It is also on target to close another £10 million of loans by the end of April.
The £9million of lending this week was principally in the north of England, at an average of 55% LTV with an average monthly interest rate of 0.70% per month.
At a time when many other bridging lenders are having to mothball their companies, either because they can no longer get funding or because they do not have access to surveyors, pension-funded Fiduciam is managing to buck this trendy, having just completed a highly-successful week.
The LTVs against which Fiduciam lends are naturally more conservative than prior to the crisis. Yet, demand for short-term business credit is high and Fiduciam is seeing a pipeline of work comparable to record highs before the crisis.
There are clear operational challenges to get transactions to complete because of the lockdown, but Fiduciam has been working collaboratively with other organisations and most operational issues have been successfully overcome. For instance, Fiduciam is working together with RICS valuers and surveyors who still can visit premises. The lack of flights is being overcome in cross-border transactions by having staff spread out geographically and by working closely with trusted local partners. All of Fiduciam’s employees are working as normal but remotely.
Johan Groothaert, CEO of Fiduciam says, “We have seen many short-term lenders close their doors and this is a pity because it is today they are needed most, especially when lending to businesses. We are very concerned that the general lack of credit for SMEs will exacerbate the crisis, in fact it may be worse than the direct COVID-19 implications for many SMEs.
“We have, for instance, been approached by a health care SME that needed an urgent loan to fit out a new facility, with an agreed contract to provide beds to the NHS, but who had been unable to get finance. How is this possible?
“I am glad that Fiduciam’s diversified institutional funding model has proven to work during this crisis and we are grateful to our institutional partners for keeping their commitment to helping to fund small businesses and entrepreneurs in these difficult times.”