"We are seeing a lot more ‘traditional’ landlords diversifying and branching out into the commercial/semi-commercial space so it’s important for brokers to have knowledge of this"
FR: What made you get into commercial finance?
I began my finance career straight out of university in 2000 where I studied business and marketing. I joined Clydesdale Bank in the September and its where I stayed for the next 19 years. During that time, I started out as a cashier and I worked my way up, reaching a role of private manager where I was looking after more high net worth type of clients with all their finance needs, from banking to mortgages. I then moved over to the intermediaries side at Clydesdale in 2010 where I was then working on buy-to-let and residential mortgages until the Virgin Money merger when I took redundancy.
My next move was into specialist finance as I wanted to explore an area I hadn’t done before so I joined Aldermore where I started working on portfolio lending and bigger ticket buy-to-let cases. Just after I joined, Covid hit and we went into lockdown, but I still managed London remotely and was there for two years. This is where I started building my knowledge and skills in specialist finance, in particular how to support cases from enquiry through to completion.
In February 2022 I joined OSB Group and at that point, I’d not done commercial or semi-commercial finance and working under the InterBay brand provided the ideal opportunity for me to learn. This role also provides the opportunity to see cases from enquiry to completion teamed with access to subject matter experts every step of the way.
FR: What is the attraction of working in the commercial/semi-commercial environment?
I am now two years into commercial/semi-commercial and I love it. I don’t see me leaving the commercial/semi-commercial space, it’s such an interesting environment as I am shaping deals for brokers and their clients. You are helping people achieve their business growth and I am getting to see so many different asset classes which makes every day different. I am working with a range of different brokers with clients who have differing needs.
You really have to step back when looking at a case to fully explore different options in order to structure a solution that works best. As this arena is so specialist, brokers do use us as trusted advisers when looking at more obscure cases as we may have come across a similar challenge before and we can also get the early engagement of our in-house underwriting team. We also have a very experienced completions team that help us to overcome any potential challenges and also carry on the communication once a case goes to offer to keep the client updated. It’s great to work with and have the support of different colleagues across the business. InterBay is about bespoke solutions, where detail and information are key.
FR: Are there any ‘trends’ we are seeing with the commercial/semi-commercial space?
We are seeing a lot more ‘traditional’ landlords diversifying and branching out into the commercial/semi-commercial space so it’s important for brokers to have knowledge of this and how the process works as it is different to other lending. If you are a broker that has no or limited experience in commercial/semi-commercial, just pick up the phone and discuss it with your lender – its easier to talk it through.
Recently, I have noticed a lot more remortgages away from the high street. Specialist lenders have the ability to look at options that the high street might not, such as 25 years full interest only options (compared to only five years on the high street) or the fact that high street tend to underwrite owner-occupier deals on a business and specialist lenders underwrite on an asset basis.
There’s also demand for end-to-end product transfer processes for commercial/semi-commercial lending. This is where clients are looking for the certainty when placing business with a lender that after their two or five-year fixed rate, they will have options from that same lender which isn’t currently commonplace in this sort of lending.
FR: What’s the main differences when placing a buy-to-let case vs a commercial case?
There is a lot of knowledge sharing in commercial/semi-commercial with brokers. Due to the nature of the space, it is different from your residential and buy-to-let cases and how the processes work for those.
For example, in commercial/semi-commercial cases, we work on the vacant possession or investment values and not the market value. These are lower compared to the market value of a property which is absolutely vital when managing clients expectations from the outset.
It’s all about solution-based lending, shaping deals that support clients requirements.
It’s also about being part of the client's journey with their broker, looking at long term plans means we can structure finance that is inline with their growth or even their exit plans.
InterBay is about creating bespoke solutions and due to the complexity of commercial/semi-commercial, rate is usually secondary against service and achieving the client's finance objectives. Our expertise and in-house support means brokers and their clients will get real solution-based lending.
FR: What key points would you give to a broker with a client who looking to diversify with their first steps into this area?
Firstly, if you are a broker that hasn’t worked a commercial/semi-commercial case or it’s been a while since you have done one, then just pick up the phone to your lender. Like in the rest of the specialist marketplace, things are always changing so it’s always good to chat things through first.
The very first question brokers need to be asking their clients is what sort of asset the property is – is it retail with residential units above, is it an office space, or could it be a warehouse?
If this is for a buy-to-let investment, is there a tenant in situ and if there is, you need to know: the length of the contract, if there are any break clauses, about any rent reviews and also the standard AST (assured short hold tenancy) agreement.
If there is a residential element you need to know if this is already let, if it’s not, you will need to know the anticipated rental income and if it is let, you will need the standard AST (assured short hold tenancy).
