UK-wide peer-to-peer business lender Assetz Capital has established a Liverpool presence for the first time as it looks to target SMEs in the city region. Tony McDonough reports
Peer-to-peer business lender Assetz Capital has hired former Santander banker James Evans to establish its first operation in Liverpool.
And James, who is himself Liverpool born and bred, is keen to raise awareness of the Assetz offer. He told LBN: “We have a genune appetite to do lending to SMEs here in Liverpool and that is important to me.”
James left the Santander office in St Paul’s Square in Liverpool’s commercial district. He had worked for the UK arm of the Spanish banking giant for 18 years, joining the business when he was just 18.
Despite being based in Liverpool his patch covered much of northern England and as far north as Aberdeen in Scotland. He joined Assetz as he was keen to focus exclusively on SMEs in Liverpool city region and to break free of the one-size-fits-all, computer-says-no approach of major banks to SME lending.
Assetz facilitates peer-to-peer lending. This is where individuals can lend money directly to businesses or property projects. It could be a small saver with just £1,000 to invest or a high net worth individual. Assetz acts as an agent between the investor and the borrower.
People can choose to invest their money into a single business or project via a direct access account. This will be higher risk but also offers potential better returns. They can also choose to invest into a deposit account with the investment spread over multiple projects, offering a safer bet but typically lower returns.
The company also has institutional backing. In February this year it was revealed that Aros Kapital will inject over £1bn into lender Assetz to fund lending to small businesses over the next three years. So far the business has attracted more than 41,000 investors, has lent £1.5bn to businesses and has generated almost £200m in gross interest.
All loans are secured on property. James told LBN that its “sweet spot” is smaller property developments in the suburbs. He explained: “We will do development finance from £500,000 upwards – it could be a plot of just three houses up to maybe 30 houses or apartments.
“We take more of a commercial view on things. We don’t fund the big developments but property development is our sweet spot. We offer general property investment facilities and commercial mortgages. We will do bridging finance as well, if for example someone wants to buy a property at auction and then we may offer development finance as well.”
James adds that, unlike the high street banks, Assetz is willing to lend to businesses in sectors that might be seen as higher risk. He said: “In terms of the general risk appetite. We also look at sectors that other lenders have less of an appetite for.
“For example we will look at pubs, bars, restaurants, care homes. We will look at a lot of sectors that have taken a hit in the last couple of years. Everything is secured by property and we will offer commercial mortgages from £250,000 upwards.”
After spending his whole career to-date with a big high street lender, James is pleased to be working in what he says is a more flexible environment. Rather than being risk-averse, he explains, Assetz is open to making deals happen.
He said: “I think what is good is that we will take a commercial view. I get to speak to our credit team very early in the process so we can get an idea if that is something we will invest in very quickly. I can have a chat with the people in credit so we work in a way the high street lenders won’t.
“So someone in the credit team will have done an initial review of a request within a day or two of it coming in. That is not how banks work – in that case you wouldn’t get an indication until quite late in the process.
“The parts of the process that take the longest are the valuation or the solicitors. But what I have found so far is that the people in the support team are very pro-active in speaking to the lawyers and they will engage with them as quickly as possible.”
Despite only being in his post a few weeks James is already working on a number of local deals. They include a possible residential development in south Liverpool and another development facility potentially worth up to £4m.
“Property development is our bread and butter,” he said. “We have a big appetite across all sectors. There are a lot of good SME businesses in Liverpool and we want to make them more aware of what we do and how we work.
“In Liverpool city centre there are a lot of big developments with multiple apartments. We are probably less interested in that than we are in someone looking to build maybe five houses in one of the suburbs of the city.”
For the last 10 years at Santander, James worked in the bank’s property team. This has helped him build up a good network of contacts among the city’s professional community, such as lawyers and accountants. He is keen to spread the message to them about what Assetz has to offer.
He added: “We have never had a dedicated person in Liverpool before. I am from Liverpool and have worked here my whole life. I want to make sure people are more aware we are here and that we have an appetite to work across multiple sectors.
“It is a local pride thing. We can go to credit early and they might say ‘there is a little kink in this’ and then we can go to find a solution. Even if there is a bit of adverse credit in the background we will be able to take a view on it. And if the deal stacks up then we still go ahead.
“There is a genuine appetite to get a deal done. It has been genuinely refreshing that we can look at something and find a way of getting it over the line.”