Business is booming for Bridging Vat, the specialist lender advancing short terms loans for the VAT due on commercial property purchases.
That's the undeniable message from company co-founder Alan Smith, who focuses on all aspects of the business including funding, loan origination, execution and VAT recovery.
Writing in the Quarterly Return (the trading report which includes a financial overview, industry news and insights into the quarter ahead), Smith has told of the third quarter of the year seeing a "continuous flow of new enquiries from both our ever-expanding broker network, and direct from property developers and owner-occupiers, following a successful first six months of 2019".
Smith was speaking on behalf of Bridging Vat, which is managed by chartered accountants and debt advisory professionals with an in-depth knowledge of the property sector, with the aim to provide a "unique level of expertise in both the funding and recovery of VAT".
And he added: "Sectors that we have provided illustrations for include office buildings for conversions to residential, student accommodation units, industrial units, public houses and hotels.
"Through the course of the last three months, we have seen an increasing number of properties be subject to a down valuation from the agreed sale price with final figures coming in lower than expected between 5 per cent and 20 per cent as senior debt providers seek comfort in an uncertain marketplace.
"These situations result in pressure on our clients having to use more of their own capital to complete the deal, making the use of our VAT bridging facility even more important. Rather than tie their own capital up with HMRC, our clients are able to retain their liquidity, even if more equity is required to complete on their project.”
Smith goes on to say that, from the perspective of the business, the UK commercial property market has continued to be active throughout the summer and seems to be withstanding any political and economic uncertainty, as its clients are still actively searching for, and securing development sites: “We have also seen owner-occupiers request illustrations where they are expanding and either purchasing their own premises or new build commercial units."
The report follows the company's hosting of its inaugural lender and Intermediary day at the BMW PGA Championship held at The Wentworth Club. And smith continued: "The event saw some of the best golfers in the world challenge at one of the top golf courses in England; a fantastic time was had by all and we look forward to repeating the event next year with our partners.
"Our sales director, Mike Underwood, has been promoting Bridging Vat via our broker network and as a Patron of FIBA. Mike talked about our service to developers in a podcast with Michael Primrose, aka The Property Finance Guy which is now the second most listened to podcast on his channel.
"Mike also presented at the ever-popular Progressive Property Network (PPN) Bank event to a room full of developers, all keen to understand the benefits of bridging the VAT on their purchases. To round off the quarter, another FIBA roundtable event was held at Gatwick and was very well supported by local brokers."
What’s next for Bridging VAT?
Next up it's all about Q4 and with institutional funding and a near-term pipeline in excess of £29million, the company is confident of continued growth in deal-origination as well as building on the network of introducers and lending partners.
Smith added: "We will be exhibiting at the South Coast Commercial Property Show on the 31st October where over 500 property professionals are expecting to attend. The event, supported by Bournemouth, Southampton and Portsmouth Property Associations, still has available tickets which include entry, seminars and lunch at: www.southcoastcps.co.uk/tickets
"With our presence within the industry growing, Bridging Vat are now being recognised as the experts in funding, and have been invited to speak on a panel of specialist property lenders at the Mortgage Business Expo (MBE) at the Barbican in London."