It’s often said that hindsight is a wonderful thing, but in our industry, we see time and again that the kind of experience from which developers learn the most, is exactly what can make it hardest for them to go on to future success. The reason? The ‘one strike and you’re out’ policy that underpins most traditional bank lending when it comes to property development finance.
At Ultimate Capital, we ‘get’ it. The big banks rely on the tick box mentality – because they’re not property developers. They need protocols that flag up risk, not those that recognise potential. Even the newer breed of ‘challenger’ banks, as they grow, bring in backers and depend more on ‘big bank thinking’ – restricting any initial entrepreneurial approach to their lending.
But this suggests that the decision to decline a finance application would be quick, when often we hear that’s far from the case. We can understand the temptation to be swayed by rates, but a potentially poor service and associated red tape can be equally, if not more, costly. If the eventual outcome is “Computer says no”, that window of opportunity may have passed and it could be too late to make the deal.
Ultimate Capital strives to be different. We’re seasoned property developers ourselves – we understand first-hand the challenges our customers come up against. We know that slow decisions, u-turns or a myriad of other circumstances beyond a customer’s control could result in a CCJ, a bankruptcy or a company liquidation – and scupper a good credit score for years to come. We focus on the future, not the past – evaluating each opportunity on its own merits, rather than just on credit history.
And how can we do that? Well first, we have our own substantial funds to lend, so we’re not answerable to investors other than ourselves. We’re interested in building long term relationships; it’s what we’re known for and what we do well.
We meet our clients and visit projects across the country. We get to know our customers and their opportunities, so that we’re not just depending on spread sheets and algorithms – we ’re looking at the whole picture. So we see beyond the boxes ticked, a project’s postcode or a client’s sector experience – if their background is in care homes, but a residential opportunity comes up? Of course we’ll consider it.
The most important thing we ask of our borrowers is: tell it like it is. Don’t feel the need to conceal past glitches, don’t try to hide anything – be straight with us, then we can find you a quick and simple solution. We’re interested in what we can learn – together – from past experience, in a mutually profitable long term business relationship, without limits.
Sometimes though, there’s absolutely no fault with the borrower and no experience is enough. We were recently able to cut though complications (including three sets of solicitors!) to salvage a deal where the customer was a high net worth individual who’d been declined a loan from his bank of over 40 years… purely on the grounds that he was now over 70 years old. Ultimate Capital came through with £1.4 million of funding in six working days to save the day.
We had a record year in 2015 – doubling our lending and the size of our team, but keeping the ideals behind our business model firmly intact. So the next time you’re involved in a deal where it looks like past history could stop a great opportunity in its tracks, don’t hesitate to make Ultimate your first port of call.