What is Tenn looking at in terms of security and borrower profiles?
In any bridging loan, we want to see a great asset or a great borrower. Breaking that down:
A Great Asset
We always want to see a luxury property in a desirable location, whether it is in the UK or not. We look at the asset in terms of its value, the liquidity of the market in which it’s located, and the LTV. If there is a quality asset and the rest of the deal stacks up, we can consider lending.
A Great Borrower
We like to lend to respected, professional, and credible individuals. We consider borrowers and their merits as a whole, rather than setting limitations of who we can lend to in terms of profile, net worth or income requirements. To us, a great borrower has a solid financial background and has a good track record in business, is proficient in handling their personal or business affairs (alongside advisors), and is respected in their profession or field of influence.
When we are approached with a deal that involves either a great asset or a great borrower, we will do our utmost to assist. When both of these elements are present, things are definitely easier.
Residential Borrowing
We offer unregulated loans against prime real estate in the UK and outside of the UK. We can provide loans for light refurb projects for the right borrower, but we do not offer development finance or commercial bridging. Our borrowers tend to be high-net-worth individuals, and we specialise in offering loans in the £1 million to £10 million range. As a result, our processes are set up to facilitate this and execute these loans at pace.
Initial Lending Decisions
In the first instance, we do not need lots of information about your client to let you know if we think we can lend. It is enough to outline your client’s profile and why they want to borrow, how much they want to borrow and their exit plan. If there are any unusual elements in the deal: don’t be worried about being open with us from the get-go. We don’t write off lending just because we need to structure the loan around a specific scenario or if there are components in it that other lenders would not be able to accept because it isn’t a ‘plain vanilla’ transaction. However, the sooner we know about anything unusual, the better we can consider solutions, clarify timelines, and give an initial lending decision.
If we can, we will give you an idea of whether or not we can lend after these initial discussions, provided we have enough information.
Documentation
If we can lend, we will let you know what documentation we need to proceed. Sometimes what we need in terms of documentation will vary, depending on the borrower’s background, the loan and other factors. We don’t ask for superfluous documents, but we do need to see everything we ask for as it is the basis of our screening and underwriting processes.
In many cases, a borrower’s advisors can support you as a broker to compile these documents (i.e., overviews of assets and liabilities for HNWI, which can be relatively wide-ranging). We will work closely to facilitate this process for you as a broker and your client.
Borrower Plans and Exit
Naturally, we will also be looking at what the borrower wants to achieve and their rationale for seeking a loan, plus how they will exit the loan. Clarity on any of these points is vital in any kind of loan, but especially so when a borrower is looking for short term liquidity finance.
We need to be able to get behind a borrower’s plans and understand how the exit will come to fruition. These plans do not need to be overly intricate in how they are presented. Still, they must be clearly documented and cohesive, and the borrower or advisors need to be able to explain succinctly and with confidence how they will execute them. We will look at plans in-depth, and the numbers must point to a quality loan and borrower.
Lending Committee
Tenn is a lender with immediate access to the capital that we can lend – we aren’t searching the market for finance when a borrower approaches us. Our credit committee is the single decision-making function in our credit process. There is no multi-layered approach to approval. This means that we give absolute certainty to you when we offer
We Look at Lending as a Solution
We are open to creating short-term lending solutions alongside brokers, and we actively encourage brokers working with borrowers that other lenders cannot serve to approach us. Common scenarios may involve the inclusion of structures or corporate entities in a deal, borrowers with significant assets but low income, the need to create liquidity quickly to solve a problem or create an opportunity and so on.
The foundation of our approach is always the same: we want to offer quality loans and see a great asset or great borrower. However, if we can create a lending solution in an unusual setup where one or both of these elements are present, we will do our utmost to do so. We have previously offered loans in transactions where we have lent directly to corporate entities, to non-UK based borrowers, against international assets and in deals involving an unusual asset. In these transactions, we have effectively created a one-of-a-kind lending solution for the borrower and, by extension, their broker.