Specialist bank looking to alter its business model and offer larger loans

40 Spring Gardens

Challenger bank Aldermore is looking to increase its exposure to larger commercial development loans.

The bank, which earlier this month expanded its office space in Manchester’s 40 Spring Gardens, said it is looking to alter its business model.

Commercial director John Carter said that while the bank has previously served the lower level, it hasn’t really penetrated above that.

So, he added, it wants to grow its coverage to help bolster its balance sheet.

Mr Carter said the bank will continue to serve the existing market, but it has grown the team to have the skills set to cover the full breadth of lending.

“I think it’s just (that) we’re looking at the number of transactions which are in that investment space, and we’re seeing a lot more opportunities there,” said Mr Carter.

The bank believes there are prospects in the £5m-plus space.

Mr Carter added: “That’s for existing customers that want to grow, but also to entice new customers in that are looking to invest there as well.”

Another of the specialist bank’s major focuses is to increase the amount of lending via its development-to-hold proposition.

This allows a developer to refinance a development loan on to a commercial lease, from three years up to 20 years.

Aldermore said it will provide up to £25m of funding for this on PBSA schemes and later life residential developments, including supportive living.

Mr Carter said: “We’ll provide them (with) a one-stop shop.

“We’ll fund the development and once the development is completed, we’ll create another facility and offer them the option to move to a commercial mortgage.”

He said Aldermore had seen demand for this because it saved on costs: “So, being a one-stop shop does make it a bit more efficient.”

On March 5, it was announced that Aldermore had taken extra space across the first and second floors of 40 Spring Gardens, approximately 20,000 sq ft, on a 10-year lease.

It meant that the Grade A office building is now fully let.

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