In The Post Brexit Era, What Are Lenders Thinking?
I have written about Brexit, what it could mean and what the SME should be doing to ensure they protect their funding options. However, what are the lenders saying? Knowing how the commercial lenders see the world gives a great insight into business lending going forward.
Let me show you what a range of lenders are saying. There is a broad range of lenders here, from mainstream to niche, from behemoths to new players. There is also some honesty coming through.
The Commercial Lender’s View
Lendinvest, the online based property lender pulled the plug on second charge lending after the referendum result. They were quick to highlight that they do not see a downturn similar to 2008 but wanted to get some clarity first;
“It is possible we will see some downward movement in house prices around the country, particularly in London and the South East, as the market resets to the new status quo. At the end of the day people still need house to live in and the fact we are leaving Europe doesn’t change that”
Mark Posniak, MD of Dragonfly Property Finance acknowledged the uncertainty but stressed their keenness to support brokers and their clients;
“In line with other specialist lenders, Dragonfly will fine-tune its risk where necessary to reflect changing market conditions, but its deal appetite remains strong”
Angus Dent, CEO of specialist lender Archover was open about not knowing what the future held, however with their business volumes increasing he said;
“Successful companies have clearly not lost the confidence to raise the finance they need to develop and grow their businesses, while lenders have equally not lost their appetite for keeping their investment returns as high as possible in this uncertain world”
Stuart Law of Assetz Capital took a more holistic view, commenting on the challenges for retailers to recruit due to immigration changes and that this could see an upward pressure on wages, this was followed by;
“..We could also see bank savings accounts go to near zero interest rates to reduce demand from savers because we also expect to see banks quickly reduce lending to businesses and housebuilders again and they will therefore have less need for those deposits”
Bear in mind that Stuart’s comments were before the most recent base rate reduction, a little perception perhaps!
The overall view was one of uncertainty but that was at least shared honestly, lenders do want the business it may just get a little more challenging before it gets easier.
The Overall Commercial Lender Position
What comes out clearly is that the commercial lenders want to lend. Having unused cash is becoming less attractive, however this is tempered with tighter approval criteria. What this will likely mean is greater competition from lenders for a few deals and a harder time for the more challenging cases.
The overall position remains as I have said before, that companies need to look at their sources of funding and get them protected before lenders move their criteria too far. If you have access to finance then get it assured, if it is due for renewal then get it done now before things move against you.
If you want to know more about the best business finance options for your company then please get in touch. For any comments please add them below or use the contact form to get in touch.
By Dave Farmer
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