The F&P contingent have returned from MIPIM buoyed by the incredibly positive reception they received in Cannes. Ivor Freedman (pictured left) met with many developers and property professionals including Hiten Shah, Principal of Jenga plc (pictured right), and reports further keen interest regarding a diverse range of projects. “For many developers, peer-to-peer lending or, more accurately, peer-to-business lending, is an ideal option, and for many it’s their default source of property funding.”
Compared to banks, peer-to-peer (P2P) is relatively unconstrained and borrowers are increasingly making it their first port of call. It is a refreshingly fast and simple route to project funding and works very well for many property developers. Too often, prospective borrowers embark on a long and frustrating application process, only to be turned down by the banks at the eleventh hour. For many projects, funding is time sensitive, and developments are compromised when precious time is lost. Hence the rise in popularity for P2P.
Freedman continued “Property investment is attractive to many of our P2P lenders. It has fundamental safeguards for lenders built into it, and lenders can price to risk and spread the risk amongst the crowd. That’s why P2P has become so important in the property sector. In addition, smart lenders will only look at loans that have been brought to market by sponsors. Sponsors like F&P are professional business consultants who look closely at the borrowing business and ensure it is well structured, properly managed and financially secure enough to take on the loan. This compensates for the due diligence that a bank would otherwise have conducted, and gives the borrower and lenders the reassurance they need to enter into the arrangement.
We have many clients in the property sector who have developed a succession of projects on the back of P2P funding and built award-winning, multi-million pound businesses (eg: Beech Properties, Manchester). Lenders soon identify a good borrower and track their loan applications. As a result, many of our clients’ loans are filled within hours. I believe the record so far is 87 minutes.