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Is lifecycle lending the future?

7 Dec 2017

This article first appeared in Bridging & Commercial.

Having spent 15 years in property financing, the term Lifecycle Lending, where a single lender is able to meet a borrower’s whole range of financing requirements, is relatively new. It’s also one that is receiving increasing market attention.

In today’s rapidly evolving market, with traditional high street and private banks increasingly unable or unwilling to both meet a borrower’s complex and bespoke requirements, and deliver it with an efficient and high level of customer service, it’s also an increasingly attractive proposition.

There are many competitively-priced finance products available for borrowers, but they still face the same day-to-day challenges. When I started in banking, a senior account manager was the single port of a call for all of a borrower’s funding requirements. This allowed a high level of service at all times and responses were swift. The manager understood the business model and had all their information on one file, which could be accessed at any point.

A borrower now faces higher costs, as they usually have to place their commercial, development and investment borrowing requirements with different lenders, or with different teams within the one financial institution. Each lender has a different legal and valuation panel, meaning that the due diligence conducted at acquisition stage cannot be used for the next stage of lending. This makes each stage of the process unduly complicated, costly and time consuming and ultimately very frustrating for the borrower.

Whilst it’s recognised that a single account manager at a specialist lender may not have the necessary knowledge of each property sector, the market is ripe for those lenders that can offer this expertise under one roof, via a dedicated Business Development Manager, whilst still remaining competitive and offer high levels of customer service.

The same valuers and lawyers should be used for all stages of the transactions lifecycle, resulting in cost and time efficiencies. A commercial property expert, working alongside a development finance expert, supported by a dedicated Business Development Manager who specialises in investment, will see excellent customer service levels become the norm again in the industry, with swift provision of terms. Prioritising internal processes, including know your customer (KYC) rules and compliance, ensures each stage can be executed swiftly with the borrower benefitting from the synergies.

At Octopus Property, our unique take on Lifecycle Lending is a 360 degree proposition, providing borrowers with a comprehensive range of financing products. We can work in tandem with other parts of business to offer commercial bridging acquisition facilities, which can be flipped into development on grant of planning and then into an investment facility.

The strength of our wider team allows us to offer a cheaper range of products and services that have been tailored to meet borrower’s needs and have been launched to allow us to deliver on any project, at any stage.

For journalists in their professional capacity only. Personal opinions may change and should not be seen as advice or a recommendation. We do not offer investment or tax advice. Issued by Octopus Property. Octopus Property is the trading name of Bridgeco Ltd (Reg No 6629989), Fern Trading Ltd (Reg No 6447318), Nino Ltd (Reg No 9015082), Octopus Property Lending Ltd (Reg No 7531926) and Octopus Co-Lend Ltd (Reg No 8913299), Registered Office: 33 Holborn, London EC1N 2HT, registered in England and Wales and Dragonfly Finance S.ar.l. (Reg No B189290) Registered Office: Parc d’Activité Syrdall, 6 Rue Gabriel Lippmann, L-5365, Munsbach, Luxembourg registered in Luxembourg. Octopus Property Lending Ltd and Octopus Co-Lend Ltd are authorised and regulated by the Financial Conduct Authority. Issued December 2017.