Property Lending

Background to secured lending

Whilst many mainstream banks provide loans for residential mortgages, many property developers seek out specialist lenders to finance their projects.

Elm Trading participates in two types of secured lending: development finance and operational real estate finance. Property lending provides financing to property developers to fund new projects, typically for the construction of apartment or housing developments in established towns and cities.

Operational real estate finance provides funding for existing and operational asset-backed businesses, such as hotels or care homes, to fund renovations.

For both types of loans, we seek security on a first charge basis, meaning that in the event a loan is not repaid we can take possession of the assets.

Loans are typically provided to experienced borrowers pursuing opportunities in desirable locations and sectors. The secured lending business capitalises on the attractive returns which can be derived from providing debt finance to the property sector.

Lending criteria

Utilising the vast experience of our specialist lending team, we are focused on funding opportunities which fit within the following criteria.

Preferred location and property type:

Location – London, South East or South Coast of England or other affluent areas elsewhere in the UK, such as Bristol, Bath or Cheshire.

Typical funding specification:

  • Property loans at suitable defensive LTGDV and LTC ratios. Operational real estate loans of up to 65% current market value.
  • Loans typically between £5 million and £30 million (including interest and associated costs).
  • Loan terms of 12 – 24 months for development finance or up to 5 years for operational real estate

Developers:

We require our borrowers to be robust, with a demonstrable track record of managing profitable development projects.

Why property lending is an attractive trading opportunity

  • Predictable returns through interest and fees earned on each loan, which are agreed at the outset and must be contractually paid
  • Risk mitigation through loans secured against the property on a first charge basis and, where appropriate, additional security is provided through corporate and personal guarantees