Over the past ten years, the Commercial Property Finance market in Ireland has experienced considerable disruption, with an influx of alternative lenders now providing those in the CRE space with another source of capital. Alternative lenders, also known as ‘non-bank’ and ‘direct lenders’, have found a place in the Irish market due to a funding gap created by traditional lenders refusal to take on smaller property investment loans. Alternative CRE lenders in Ireland now present property investors & developers with another viable option when seeking finance for commercial property projects.
Why Is The Alternative CRE Lending Market Growing?
Traditional banks have been responsible for over 90% of Irish lending, with developers and those in the CRE market heavily dependant on this single source of finance. Following the global recession, banks’ have taken a different approach to lending, with a stringent criteria and more penal capital requirements put in place for CRE lending requests, leaving Irish companies needing to find alternative options. The more stringent criteria includes more intense stress testing, which impacts a percentage of borrowers who have a poor credit history, thus making it more difficult to access capital. See more about alternative vs traditional lenders here.
A fundamental difference between traditional banks and alternative lenders is the approval rate. Alternative lenders have a high approval rate north of 60%, while traditional banks are closer to the 20%-30% mark. Other key benefits of non bank lenders include:
Interest in funding projects which may not interest bigger players
Efficiency and time saving online portals
Regular updates on application process
Flexibility in structuring deals to satisfy both parties
Types Of Loans Available
The most popular loans supplied by Profunder are available below. Similar to traditional banks, a number of options are available for commercial property financing.
Asset refinancing allows the property owners regain control of their assets. It provides funding solutions for the settlement of a loan secured on commercial real estate which has been bought by one of the many loan acquirers in recent years.
A bridging facility is one of the most popular commercial property financing options. It provides developers with an immediate cash injection, allowing for immediate funding of projects. Bridging loans are generally short-term loans, with the term less than 2 years in most cases. Bridging loans are requested when a developer is waiting for long-term financing to be approved.
Interest Only Facility
Interest only facilities can be provided to allow the property owner time to manage their property assets in terms of maximising the income stream from the properties. This will improve both the capital value of the property and long term loan repayment ability.
The Lending Process
All the usual due diligence and standards apply when looking for CRE finance from an alternative lender. Each loan application is treated as an individual case, with the repayment plan devised based on opening loan to value position, cashflow from the property, quality of tenants and property location. The major difference between alternative lenders and traditional lenders is the underwriting process, with time, feedback and risk management a USP of alternative lenders, ensuring a transparent process. You can view the our complete lending process here.
Commercial Property Outlook for 2019
A PwC report titled “Emerging Trends in Europe” ranked Dublin 3 out of 31 cities to watch out for in terms investment and commercial property development. On a whole, those involved in real estate remain bullish and still see value in the market. You can read the full report here.
Meet The Profunder Team
Tom has over 30 years’ banking experience and has built strong relationships with some of Ireland’s leading business people. He holds an MBS from University College Dublin and is a member of the Institute of Bankers. Tom is responsible for client origination and capital raising on behalf of our clients.
Co-Founder & Director
Cathal has over 30 years’ experience in wealth management and asset management both in Ireland and the USA. He holds an MBA from Boston College and is a CFA charter holder. Cathal is a Director of LeBruin, Sentenial, Origin Capital and Profunder.
Eamon has over 13 years’ experience working in financial services in Dublin and London. He has significant experience working in commercial banking and restructuring. A business studies graduate of Dublin City University, Eamonn looks after client origination and capital raising for our Clients.
Conor has over 10 years’ experience across Corporate Finance, Corporate Banking and Investment Banking. Holding a degree in Commerce and a Masters in International Business, Conor is also a member of the Association of Corporate Treasurers (ACT). Conor’s experience covers commercial lending, debt advisory, bond issuance and initial public offerings (IPO). Conor has worked in both London and Dublin, for a variety of major financial institutions.
Chief Operating Officer
Fiona has over 10 years’ project management and finance experience across multiple sectors. Fiona is studying towards her Company Law degree. In her role as Chief Operating Officer, Fiona is responsible for the efficient management of several key areas of Profunder's business and has a pivotal role in the contribution and execution of the decisions of the board.
Frank has several years’ lending and corporate banking experience working for a leading alternative lender and an Irish pillar bank. He holds a degree in Business Information Systems from University College Cork and a Masters in Financial Services from University of Limerick. Frank is responsible for origination and capital raising for our clients.
Chief Technology Officer
Patrik has over 25 years' technology experience in diverse fields including online, mobile, e-commerce and financial services, spanning the fields of project/program management, software development/ integration and product creation/ rollout. Patrick holds an MA in Psychology, and is responsible for all technology aspects of the Profunder platform.
Fiona has over 7+ years’ experience in portfolio and relationship management roles in the Irish Market. She holds an undergraduate degree in Business and Law and is QFA qualified with the Institute of Bankers. Fiona is responsible for managing Profunder’s portfolio of clients
Jack has 4+ years’ experience in the financial services industry working in the areas of Capital Markets and Corporate & Business Banking in both London and Dublin. He holds a BSc and an MSc in Corporate Finance from University College Cork. Jack is responsible for managing Profunder Limited’s portfolio of clients.
Co-Founder & Non-Executive Director
Aleksandra has 20 years' of international business experience. She has held senior leadership positions in strategy, e-commerce and marketing at Google, Bank of Scotland (HBOS Group) and Dell in the past 10 years. She holds an MBA from INSEAD.