Changing Times

It’s been a year of change for short-term commercial property funder, Excel Securities. 2006 has seen the Manchester-based firm challenge the industry, by raising the bar in short-term property funding with its new loan to value ratio and by increasing the size of deals it is able to transact, not to mention expanding into new geographic markets. No surprise then, that seven years after being founded, the business is in the best shape it’s ever been in and is set for further growth in 2007.

Excel Securities was established in 1999 but the last 12 months alone have seen it successfully complete more than 100 loans, ranging in value from £100,000 to £2million. In 2006 to date its loan book has doubled. Impressive figures in anyone’s book. But what’s the story behind them and where are the drivers for growth coming from?

The management team believe it is due to a combination of factors, but perhaps most importantly, Excel’s ability to respond quickly to loan requests and the number of entrepreneurs whose understanding and appreciation of short term property funding is growing.

Another factor in the firm’s growth has been an increase in its facilities with its banking partners. Put in place at the beginning of the year, this has enabled the firm to take advantage of those entrepreneurs and business owners who recognise the benefits of short term finance by allowing it to lend more, challenge competitors and move into new geographic areas.

Loan to value (LTV) ratios are another way in which Excel believes it has set itself apart from others in the short term property funding market, demonstrating its appetite for property lending. It recently increased its loan to value ratio to up to 80 per cent of a property’s open market value (OMV).

The increase - from 70 per cent of OMV – which is available on certain deals, means it offers what it believes is the highest LTV against commercial property in the industry.

Because of Excel Securities lending approach, borrowers are set to benefit not only from its LTV increase but also because they lend against OMV, rather than a restricted sale price or purchase price. This means that if a lender has been able to negotiate a discount on the purchase price, they can benefit by still borrowing against the value of the property and so potentially fund a greater proportion of the purchase price. The result is that a borrower can often undertake a deal that they otherwise would not be able to.

The final development in Excel’s year has been its move into Northern Ireland. The firm has linked up with Belfast law firm John McKee & Sons in order to provide short term funding to businesses and entrepreneurs across the Province.

Variations in the Northern Ireland legal system with regards to property and finance mean that only a handful of firms operating in the region offer this type of funding and the market is relatively untapped.

By partnering with one of Belfast’s leading law firms Excel aims to grow its business initially through introductions and word of mouth recommendations.

It’s been an incredibly busy year and Excel is delighted that its hard work and innovative approach is paying dividends in terms of business growth. The team is all set for the challenge of making its business even more successful in 2007.