A deeper look at Tembo Financial, your creative direct private lender

"When clients need money, they need it yesterday"

A deeper look at Tembo Financial, your creative direct private lender

This article was produced in partnership with Tembo Financial.

Desmond Devoy, of Canadian Mortgage Professional, sat down with Arlen Ekstein, senior associate at Tembo Financial Inc. to discuss the company’s roots, principles, how they’ve expanded, and their newest, flexible mortgage products.

If your nose is stuck in the air, it can imply arrogance – but when you behold Tembo Financial’s elephant mascot with its trunk proudly aloft, it’s actually a sign of good luck.

The company’s president and CEO, Arryn Greenspan, hails from South Africa, where he would watch elephants with his grandfather (Tembo means elephant in Swahili).

“That’s what we strive for here at Tembo – we really put the clients’ first and we always wish them good luck,” said Arlen Ekstein (pictured), senior associate at Tembo Financial Inc.

As a private lender, it also wants people to get back on their feet as soon as possible, he added, and out of a private mortgage and into more traditional financing.

The company started in 2015 and has built the reputation of being reliable. The image that pops into Ekstein’s mind about how reliable he and his colleagues are is not to be found on the African savannah but rather atop a Canadian mountain.

“I was on vacation and going up a chairlift and picking up phone calls and working on deals and helping brokers while I was having time off away from the office,” he recalled. “You want to help people and provide solutions and give them that customer service, whether you’re in the office or not.”

The firm is also a direct lender – something that’s important for a lot of people, especially in the broker channel.

“We lend our own internal funds,” he said, a factor that sets Tembo apart from companies that are MICs and those who syndicate or administer mortgages. “It allows us to provide tremendous flexibility in how we structure deals and put together terms for clients. We’re building octagons and other unique objects around clients versus the traditional box that clients need to fit within at other companies.”

This has resulted in the company having to get creative in how it structures deals, to protect both lender and borrower.

“We’re not bound by tight parameters you often see with multiple investors,” he said. “It allows us to have that speed, creativity, and flexibility. It also allows us to be 100% transparent in everything we do, including the fees and rates that we offer.”

The speed of the 48-hour deal

“Tembo really was a two-trick pony when it got started almost nine years ago,” said Ekstein. “Just doing deposit and renovation loans.”

But he joked that “when realtors need money, they needed it yesterday.” That’s why they became adept at closing deals quickly – often in as little as 48 hours.

However, this allowed the new company to set up workflows that responded to this timeliness, “to design a program and a product that we can underwrite, provide same day commitment, sometimes instruct the same day, and truly provide funds in a 48-hour time span without any hiccups,” he said.

Tembo has dedicated lawyers and clerks on call, ready for files.

The company has grown far beyond just deposit loans and renovation loans, now offering first, second and third mortgages, still within the 48-hour frame from application to funding.

“Brokers know we’re reliable and that once we provide a commitment, the broker can at least manage the expectation with their client knowing the file will close,” he said. “We’re going to fund that deal as quickly as we can.”

One customer base that Tembo is attuned to is self-employed people.

“Self-employed people pay themselves differently, on an as-needed basis,” he said. “The banks don’t recognize that. Traditional financial institutions aren’t recognizing their income.”

Along with working from home, which really became part of the mainstream business culture during the COVID-19 pandemic, there are more self-employed people around than there used to be, with more gig and part-time work.

“Self-employment is becoming quite normal these days,” he said, and his firm has seen “tremendous growth” in this clientele. “They should not be underwritten any different from people that go into an office every day.”

Branching out into the broker channel

The biggest sector he is seeing growth in is within Tembo’s debt consolidation loan product, though there has been “tremendous” growth across all of its product lines, with renovation loans being especially healthy, even with listings down.

But Tembo is not resting on its laurels – it is now breaking out into the broker channel.

“Because we’re seen to brokers as the new kids on the block, it gives us an opportunity to promote us as an A-to-Z lender,” he said.

The company is still known primarily for its deposit and renovation loans, but now “we can also help your clients with purchase financing and pre-construction and the whole block of things. We can offer way more for you and your clients alike,” he said.

For any private lender in the mortgage space, exit strategies for clients are a top concern. Ekstein worries, though, for brokers who believe that refinancing in a year’s time will help their clients.

“If you can’t get your clients a traditional mortgage now, unless something major changes you’re likely not going to be able to qualify them even on the B side in a year from now,” he said.

That’s why Tembo has just launched a new flexible program for these types of clients, their Flex One+ Mortgage. This product helps brokers manage their clients’ expectations and alleviate potential cash flow issues over the course of the term. The way they register the mortgage is unique and allows them to plan ahead to offer the client a simple renewal (as long as their mortgage is in good standing.)

“This solution is a perfect example of how we are solution-based and create custom products for clients,” he said.

Tembo does draft up a renewal document for the clients to sign for the second year.

“The benefit to the client is that we don’t need to get our lawyers involved in the deal again, for year two, to amend the charge, should the client request to capitalize the fees and require prepaid interest for the second year,” said Ekstein. “It also gives the broker peace of mind to know that their client will have a second-year option if they struggle to find a refi solution as the first term is maturing.”

Ekstein knows that, as a relatively new player in the field, Tembo may not be a broker’s first call of choice, but he encourages brokers to “give us a chance,” and he is certain that the company will be a broker’s first phone call thereafter.

“I guarantee you that if you give us a chance, you’re going to like the way we operate,” he said. “Let us show you why we should be that first number on your speed dial.”

For more on Tembo, visit them online at www.tembofinancial.com.