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Commercial Finance Blog

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Mark AlexanderHi, my name is Mark Alexander, welcome to my Commercial Finance blog.

My business partner (Mike Woodfine) and I retired from Commercial Finance Broking in 2009 after 19 years in the business. We started with just £300 each of investment and worked from my dining room. By 2008 over 300 people were working with us and our business was ranked 38th in The Times Profit Track 100. At that time we were processing around 2,000 applications every month.

We missed the boat to sell the business at the peak of the market in 2007 and also declined previous offers of a reverse floatation in 2003.  At the height of the onset of the credit crunch we made the difficult decision to take early retirement and put The Money Centre into hibernation. Many of our former team remain good friends and are now working in other financial services businesses.

After attending the National Association of Commercial Finance Brokers 20th Anniversary celebrations we are contemplating what to do next. We could look to sell what’s left of the business but in a market which is strapped for cash the timing is still probably not right.

We still have several hundred businesses contacting us every month to “pick our brains”, even though they know we are retired and are now focussing on our property investment portfolio’s and the Property118 website. We like that as it keeps us in touch with the market and we enjoy being helpful.

Most of the people who contact us simply want to get a second opinion on whether funding is viable or to seek advice on who they should approach.

Despite being inspired by recent events we still haven’t made a decision on whether to go back into full time commercial finance broking. What we might do though is provide a low cost service based on assessing deals and acting as a “dating agency”. Some businesses want to deal with a good broker and we can and already do refer them. Other business people prefer to cut out the middle man and deal directly with lenders – some lenders prefer that too. This is more of a dating agency than a brokerage but I’m pretty convinced that demand exists for it. All some people want is our knowledge of how to structure a deal and an introduction to the right people. Whilst we will continue to refer people to NACFB Members, the second business model needs to be thought though in more detail. Questions we need to find answers to include:-

  • What is the demand for professional introductions as opposed to full on broking?
  • Will a borrower to lender introduction only service constitute advice and if so what will be the ramification in terms of Professional Indemnity Insurance?
  • At what level of pricing would an introduction only agency become viable for all parties?
  • Can we persuade  boutique lenders which are hungry for business to transform their operations to cope with dealing directly with borrowers in addition to their current business models which are far more focussed to outsourcing the information gathering aspects of the decision making process to specialist brokers?

I intend to address all of these issues and report back in a series of blogs which will be shared via Social Media and in the Property118 Newsletters which and send out daily free of charge and take no more than 10 seconds to sign up to. Details HERE.

My Commercial Finance Blogs will be linked from this page – see below.

PART ONE

NACFB Celebrates 20 years of Professional Commercial Finance Broking

NACFB - National Association of Commercial Finance Brokers

On Friday 23rd November 2012 I was honoured to be invited to attend the 20 year anniversary of the National Association of Commercial Finance Brokers “NACFB” as a VIP guest.

This article is to be the first in a series of blogs talking about the commercial finance industry, in particular my personal perceptions of commercial funding post credit crunch. I can assure you, the discussions I was a party to at the NACFB event were very different to anything you have read in the newspapers. For example, did you know that there are over 30 active property development finance lenders in the UK and yet the majority of them are struggling to hit their lending targets? That’s not what the Press tell us is it? Could it be that “self limiting beliefs” amongst lenders, brokers and perhaps more importantly, would be borrowers, are prolonging this recession? READ MORE

PART TWO

The Untapped Abundance of Commercial Lending Facilities

I know for sure that many people will be shocked at my revelations in my previous blog that there are over 30 lenders currently providing property development finance. Perhaps more so that the majority of them claim to be struggling to hit their lending targets!

I asked the question in my last article “could it be that “self limiting beliefs” amongst lenders, brokers and perhaps more importantly, would be borrowers, are prolonging this recession?”

In this blog I will share my perceptions of what’s going on. READ MORE

PART THREE

Greedy BankersThe Greedy Bankers – I’d rather go bust than pay those rates!

In my previous commercial finance blog I spoke about the cost of finance post credit crunch. This time my question is; would you rather go bust than deal with greedy bankers?

It seems like a bit of a daft question doesn’t it?

Why is it then that one of the reasons UK businesses are not even applying for finance is fear of cost? READ MORE

CAMPARI - old school lenders underwritingCAMPARI stands for Character, Ability, Means, Purpose, Amount, Repayment, Interest and Insurance CAMPARI - old school lenders underwriting

It was also a popular drink in the late 70′s and early 80′s but that’s not what this article is about LOL

If you are applying for a commercial mortgage facility, chances are the person making the decision will be trained to use the CAMPARI underwriting method. Knowing how they will assess your application will improve your chances of success as you will be able to structure your business plan accordingly ;) READ MORE

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