The Intermediary – March 2025 - Flipbook - Page 10
SPECIALIST FINANCE
In focus
He says: “Mezzanine funding bridges the gap
between senior debt and equity, enabling SME
FINTECH:
FUELLING
FUELLIN
SPECIALIST
LENDING
LEND
Ll
Andrew Lloyd,
CEO of Fi
Fignum
housebuilders to take on larger or multiple
projects.”
It is not just about the products themselves
– but also speed and expertise, allowing for an
agile approach and the ability to adapt lending
structures to a specific product. Leitch says:
“Delays kill deals – SME developers don’t have
time to wait for a credit committee that meets
once a month.”
Joyce highlights the importance of being
hands-on: “At Close Brothers, we stay close to
each and every borrower we lend to, knowing
their businesses and projects inside out.”
This personalised approach enables lenders
F
intech is rapidly transforming specialist finance,
to provide fully funded development loan
making lending more efficient and accessible for
facilities and even revolving development finance,
both borrowers and lenders. Digital solutions
ensuring developers have a steady cash flow to
are replacing manual processes, leveraging
pay contractors, suppliers, and associated costs
Open Banking for expense analysis, artificial
without the typical bottlenecks of mainstream
intelligence (AI) and machine learning for document
validation, and third-party data sources like Experian to
lending.
As the market evolves, so too does the demand
reduce unnecessary data entry. These advancements mean
for more flexible funding structures. Moy notes
that borrowers can now receive near-instant insights into
that developers are increasingly looking beyond
which lenders align with their specific circumstances and
traditional housebuilding, with rising interest
a lender’s risk appetite. This shift not only improves access
in Build-to-Rent (BTR), Purpose-Built Student
to funding but also significantly reduces uncertainty in the
Accommodation (PBSA), and even mixed-use
borrowing process.
schemes incorporating commercial elements.
For SME developers, access to funding has traditionally
Sustainability is also shaping financing trends,
been a challenge, primarily due to two key factors: limited
with lenders stepping up to offer targeted
visibility on which lenders would finance their projects
funding.
and the high operational costs of manual underwriting for
smaller loan sizes.
Fintech-driven specialist finance solutions are addressing
“If developers sign up to our Green Homes
Initiative and achieve an EPC rating of A on 80%
of their scheme, we offer them a 50% reduction
both issues by increasing transparency, enabling
in their exit fees,” Moy explains. “Going forward,
earlier insight into lending decisions, and streamlining
I see specialist finance evolving to support
underwriting and offer journeys. By making these lending
even more SME housebuilders, whether that’s
processes more efficient and economically viable, technology
different types of properties or supporting
is unlocking new opportunities for SME developers—helping
different types of developers.”
them play a greater role in reaching the Government’s 1.5
million homes target.
Supporting self-builds
Specialist finance’s role in driving housing
delivery also stretches to enabling all types of
Other options include development exit
While SME developers bring much-needed
project completion and final sales, enabling
housing supply by tackling overlooked plots, self-
developers to reduce borrowing costs and
builders contribute in their own way, creating
bridging loans, which offer quick access to
unique homes that cater to individual needs
capital, allowing SME developers to seize timely
while still feeding into broader housing targets.
opportunities – whether that’s acquiring land,
Though self-builds may seem like a drop in
securing planning permission, or covering
the ocean compared to large-scale developments,
unexpected costs. For those needing an extra
every little helps in the push to balance out
financial boost, Murciano also points to
demand and supply. They represent a vital
mezzanine finance, which fills the gap between
opportunity for many homeowners and, by
senior debt and equity. This is particularly
extension, the UK’s overall housing supply.
useful for SME developers who may not have the
upfront capital to take on larger projects.
10
bespoke housing projects, including self-builds.
finance, which provides a crucial bridge between
The Intermediary | March 2025
However, one of the biggest barriers to selfbuild growth is a lack of awareness around
p
