Matt Watson, chief executive at Tenn Capital, says flexibility must be a core principle of any lender, as it creates tremendous upsides to both borrower and funding provider.
In today’s lending environment, the ability to move quickly and tailor funding to unique borrower circumstances has never been more valuable.
Nowhere is this truer than in the bridging finance market, where timing, structure and creativity often mean the difference between a successful transaction and a missed opportunity.
But why is flexibility so important for borrowers?
Flexibility is a must for modern property transactions.
Traditional lenders often have rigid credit policies and lengthy approval processes, and this simply doesn’t align with the cadence and complexity of modern property transactions. As a result, more and more borrowers are turning to bridging finance, especially at the large loan end, to complete time-sensitive acquisitions.
And this sensitivity is becoming increasingly important. Just look at some of the recent policy changes mooted by the Labour government in the UK and the impact they could have on the property market. Such changes bring both challenges and opportunities, with borrowers having to move quickly to avoid pitfalls and leverage any upsides that emerge.
Flexibility brings optionality, allowing equity to fund another project and even restructuring an asset ahead of further development or a refinance.
In each case, flexibility in sizing, loan term, covenants and repayment profile is critical. In fact, the ability to customise terms to match a borrower’s circumstances can unlock value where a traditional approach would fall short.
But flexibility is just as important for funders, too.
Flexibility allows funders to manage risk intelligently
From a funder’s perspective, private credit flexibility provides the tools to manage risk intelligently. How? Instead of applying a one-size-fits-all approach, we can take each case and structure to improve the chance of being able to provide funding.
This includes being able to adjust loan-to-value thresholds in exchange for stronger guarantees or additional security. We can also price risk for where appropriate, rather than rejecting outright.
It also allows us to support high-quality sponsors through periods of dislocation.
In short, this adaptability allows funders to maintain deal flow and improve long-term flexibility, even in risk-adjusted environments.
Why flexibility drives Tenn’s approach to lending
At Tenn, flexibility is not just a feature of our lending; it’s what we have built our philosophy around.
Our positioning as a provider of global short-term, multi-asset solutions allows us to serve both UK and international borrowers who require bridging and transitional finance.
We understand that no two transactions are alike, and that by taking a pragmatic, solutions-led approach, we can deliver the bridging finance that borrowers are looking for.
This includes delivering loans from £500k to £250m, adapting terms to suit the structure of each deal.
We also work with brokers and borrowers to resolve obstacles, even where traditional lenders may have declined.
It also allows us to provide certainty of execution at speed, which is often the most valuable asset in what is an incredibly competitive market.
A real-world example of Tenn’s intrinsic flexibility
We successfully arranged a £12m bridging loan, secured against two prime residential properties in London. The borrower initially provided at a 70% loan-to-value ratio and was able to unlock capital efficiently to fund the conversion project.
The loan supports the transformation of the properties into two luxury four-storey townhouses, enhancing the value of these prestigious assets.
The borrowers were two UK-based property holding companies with security structures of value. First legal charge over the two primary properties. Additional security over a third property. Personal guarantee from the ultimate beneficial owner.
The transaction highlights our ability to provide tailored bridging finance solutions for high-value, complex scenarios in both prime London locations and internationally.
Final thoughts on flexibility in funding
The private credit market thrives on its ability to be nimble, responsive and creative.
For borrowers, this flexibility provides access to capital when and how it is needed most, while for funders, it creates opportunities to support strong counterparties while achieving robust returns.
As the bridging market continues to evolve, the lenders who succeed will be those who embrace flexibility as a core principle and weave it into every funding process.
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