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property markets
Jun
08

Subdued Property Markets – Developer survival

According to the Royal Chartered Institute of Surverys (RICS) demand for residential property continues to decline. The number of homes that have come onto the residential have increased gradually. This however has been credited to the offloading of some buy to let properties. Although supply is not significantly out of balance with demand, the subtle changes in the market over the recent years show that the residential property markets remain subdued. Despite the increase in stock levels with Estate agents, the supply of new properties on the market remains at an all time low.

Property Markets – price growth, but demand declines

It really doesnt make sense to develop new properties when demand is dropping. Or does it? With demand for rental properties holding their own and a drop in landlord instruction, rents are going up. Consequently even a relatively short term stint as a landlord will pay off. This is true despite the loss in tax breaks for individuals. Developers that have residential property that has become hard to shift because of the lull in the property markets, could consider becoming landlords for a short period until the market develops some buoyancy. As a limited company they will still enjoy many of the tax breaks available.

Timing is the key

The capacity to time the upsurge in new demand often determines the success of a property developer. Growth and Shrinkage in property markets ebb and flow with economic cycles. Those developers that have been in the business for the long game understand this and are unlikely to consider slow moving development stock as a heavy burden. If standing stock that is providing some return, waiting for the next upturn means they will have it ready when demand returns. In the interim the property that they have on the books could be used as collateral to develop commercial spaces which are new in demand. This is especially true for shared workspaces and warehousing.

It isnt expected that the property markets are going to pick up toward the end of 2018 either. More likely is the possibility that they will remain subdued as we approach Brexit D-day early next year. The uncertainty of how the economy is going to perform post Brexit is definitely one the factors that add to the subdued property market.

Flexibility and diversity

Ultimately survival is the flexibility to diversify as rapid market changes take place. For some developers sitting on unsold stock may mean that they worry about not having the cash flow to start a new project even in a different property market. When this happens, its time to to an experienced broker such as Sam Hoban at Belgravia Property Finance. Sam has extensive knowledge and experience. He posesses an understanding of how to source financial different products to resolve different situations. Specialist brokers like him have the resources to deal with most property deals.

 


Jan
22

Business Loans and Alternative Financing

Small businesses and businesses under five years old struggle the most when it comes to sourcing affordable funding. Even medium-sized enterprises experience cashflow bottlenecks. There are different types of business loans and finding the right one for your business will involve some research.

Better still, by turning to a broker you are more likely to find one quicker. Brokers have an intricate understanding of who lends money to whom and on what terms. For the average borrower, approaching lenders directly can be a real hit and miss scenario. Especially if they’re new at it.

Reasons for funding come in a variety of shapes and sizes, much in the same way that individuals have diverse reasons. Vehicle financing, relief for their cash flow, or to increase productivity. Some business loans will be to fund the all-important research and development. The saying that you must spend money to make money is not lost on the entrepreneur.

 

Business Loans for Startups

Businesses come in different shapes and sizes. The variety of products and services available in the commercial world go as far as the imagination can stretch. With this variety there is a lender to provide for every need.

The startup loans company is a good example of a lender filling a niche. Most new businesses and startups struggle to obtain business loans because of the lack of trading history. A real chicken and egg situation for those that need the funding to trade purposefully.

 

Security

Unsecured loans are really very difficult to find, even for those that have been trading for several years. Most loans will be secured in one way or other. Asset finance is a favourite way for lenders to provide financial assistance to young businesses. Loans are otherwise secured either on property or by a guarantor.

 

Asset Finance

When considering assets, a lender will not only consider machinery and fixed property as security, but may also look at existing orders that have come in. A business that needs additional machinery in order to fulfil those orders will negotiate a deal with the lender. The lender will then secure the loan against the orders and the machinery that has been financed. On occasion, lenders will lease the machinery to the borrower and set a different loan structure to make it more viable for the borrower.

High street banks and conventional lenders are particularly shy of new businesses and startups that have not started trading. Businesses that have been established for more than two years struggle to convince bankers to lend them money. Less conventional lenders and private financiers provide better options and will consider business loans with terms that match the risk.

 

Find a Good Broker

Brokers know the market well enough to know where not to waste the client’s time. A startup could be seeking out finance for anything from £500 to £5 million. Where they turn to for that business loan will depend on the industry, the business plan, the viability, any assets that they already have, the experience of the core leadership of the business, and more. Lenders have different criteria, especially private finance lenders.

 

High Net Worth Individuals

High net worth individuals sometimes need loans to participate in a new business venture. Usually, this is because they have their capital locked up elsewhere. Even those with a lot of money will sometimes need to lend money. In fact, it may be more prudent for them to borrow money than to liquidate any of their higher performing investments.

Businessmen and women are usually good at their trade. They need someone that is specialised in business loans and finance to help them fund their business and move forward. Instructing an experienced business loans and finance broker means that the business leadership can get on with running the business while the broker finds them the funding.

For a confidential discussion about your business funding needs, contact the experts at Belgravia Property Finance.


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