Ensuring that housebuilders have the liquidity to overcome longer timeframes caused by the global pandemic has become crucial in these trying times. That's the belief of Ryan Parrett, Relationship Manager at Fiduciam.
His comments come as Fiduciam, the institutionally funded short-term lender to SMEs and entrepreneurs, completed more than £22million of loans to developers over the past month under the Coronavirus Business Interruption Loan Scheme (CBILS).
Fiduciam lends throughout the United Kingdom and has recently granted CBILS loans to housebuilders with development schemes in rural Devon, Halifax and Belfast, where plans to open a new regional office are well advanced. Of course, London and the South East remain strong markets whilst the current pipeline of CBILS applications also reaches into both Scotland and Wales.
Fiduciam has funded new projects and helped other developers finish sites, sell their units and reinvest. Loan facilities are shaped to borrower needs and can offer quantity surveyor supported development drawdowns as well as an opportunity to replenish working capital. Housebuilders can secure both the benefits of a quick recovery and the security of a longer loan term as Fiduciam’s loans under CBILS come with no early repayment charges.
Parrett states that pre-Covid the firm was working with borrowers to speed up their development lifecycle and in so doing boost their organic growth. He acknowledges that priorities have changed:
"Now, rather than promoting a more efficient use of capital, we are helping housebuilders handle delays, complete projects and restart stalled projects. Over the last few weeks, I’ve visited multiple sites and it is gratifying to see how CBILS loans make a real difference for these housebuilders.”
Marc Morris, underwriter at Fiduciam, says that without a doubt, the onset of Covid-19 has significantly lengthened the development lifecycle. He outlined how, in partnership with the “tremendously beneficial” CBILS loan initiative they have been able to assist a huge range of developers:
"Housebuilders have experienced additional delays from planning to construction to sales and the fact of the matter is that key to retaining housebuilding capacity is ensuring that developers have the liquidity to weather these longer timeframes. CBILS has helped Fiduciam assist new projects and support longer construction and sale periods.”
Fiduciam was accredited by the British Business Bank to offer loans under the CBILS in July. Delivered through British Business Bank accredited lenders, CBILS is designed to support the continued provision of finance to UK smaller businesses during the Covid-19 outbreak. The scheme enables lenders to provide facilities of up to £5million to smaller businesses across the UK who are experiencing lost or deferred revenues, leading to disruptions to their cashflow.
At the time of their accreditation Johan Groothaert, CEO of Fiduciam, said:
“During the COVID-19 crisis we continued to stand by our SMEs and entrepreneurs by advancing new loans. We now want to give them a boost out of this crisis, with the Coronavirus Business Interruption Loan Scheme (CBILS) and are very proud to have been approved for accreditation by the British Business Bank.”
Over £22million of loans in a single month proves that Groothaert and his Team have been as good as their word!