"So, looking at your CV, I can see that you did well in GCSE Math in 1996 and are well organised, punctual, and a keen swimmer?"
Here at Invest & Fund, we spend a lot of time requesting and analysing CVs but don't worry; we aren't subsidising our way with an ill-advised and unqualified foray into recruitment; when we ask people to dust off the old curriculum vitae, we are explicitly asking for a summary of development experience, as a part of the overall process of rational analysis and decision making.
The presentation of this information is vital, and it's not always clear what's required and why, so in this week's blog, we are unpacking some of that reasoning. Although every single client we look at is different, there are certain key elements we will always look for; however, unlike in mainstream markets, there is no multi-point set of data we can employ and no algorithm that dictates which direction the application goes based on statistics.
So, on that basis, profiling and selection can be tricky for intermediaries; we know this, as the number one question that's asked in origination is -
Does my client have enough experience?
The three areas below will give you a great understanding of what we look for and a starting point for your client discussions. Of course, these three areas wouldn't make or break a decision; however, these are the questions we ask ourselves when sense-checking a project.
Number one, do their aspirations make sense? We strive to support the goals and ambitions of our clients, but we also protect our partners and lenders from an over-reach scenario, where the project's aspirations in our eyes don't match the client's background. It's imperative to caveat this point with the fact that we consider the growth trajectory of the client's business; we want to partner with ambitious companies whose projects will grow and scale year on year; however, we have an overarching fiduciary responsibility to our investors to make sure that those steppingstones are measured and practical, and it's not just a leap into the unknown.
Number two, what happened with their previous schemes? One thing we will look at on the CV is demonstrable evidence of your client's previous projects. How long ago were those projects started, and what was the outcome? Were other lenders involved in those projects, and were they successfully repaid? These questions allow us to judge the client's ability to successfully complete and exit a scheme. We are savvy enough to realise that an overlap period is often required with funding to facilitate a smooth transition from one project to the next. Still, at the same time, we want to eliminate risks from previous schemes that aren't included in our security and may have ongoing difficulties.
Number three, do they have first-hand experience in their local market? There was a gold rush into the property asset market in 2021. Although the acquisition of turn-key rental properties primarily drove that, the development space and land market were not immune to the influx. Operators from many different sectors have entered the space, looking to partner with experienced contractors & lenders. This, perhaps, creates the most confusion regarding acceptable experience. At Invest & Fund, as mentioned, there is no tick-box approach; we will consider a client's overall business and background. We will look closely at their project management team and ask questions such as, is a JCT agreement in place with the contractor team? Do they have localised experience in similar successful projects and working with a quantity surveyor? Is there perhaps expertise on the other side of a JV set-up? Can we see hands-on experience within a group of directors?
These questions create a clearer picture and a more straightforward decision process, and much of this information is found, you guessed it, on the CV.
Hopefully, these pointers will give you some ideas when assessing your client's needs. At Invest & Fund, we are always more than happy to discuss opportunities to assist your clients with their funding requirements, so get sending those CVs in, and we will do the rest.
Our Development Finance clients can benefit from facilities up to 70% LTGDV (Up to 80% LTC) frm 6.40% + Bank of England Base Rate & Fees. For a full breakdown of the criteria, please email us at borrowing@investandfund.com or call us on 01424 717564.