The lender said the decision was made to “protect employees, investors and stakeholders” as it deals with an “unexpected banking-related issue”.
There has been a temporary restriction on access to Market Financial Solutions’ banking facilities due to a “procedural matter” with its primary banking provider.
The lender said that although its underlying business was still asset-backed and operationally sound, the board decided that placing the company into administration was “the most responsible way to safeguard value” and maintain stability, while allowing operations to continue under the supervision of the court.
The company expects the administration to provide a structured and regulated environment to protect its assets and maintain loan management, collections and servicing, while independent officers oversee the process and engage with stakeholders.
It said its main focus was stability, transparency and preservation of value.
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The directors of Market Financial Solutions hope to stabilise the business and explore options for its future, subject to progress made during the administration. It reassured that any steps taken would be in the interests of creditors and investors.
An ‘extremely difficult’ time for the lender
Market Financial Solutions has been in business since 2006 and recently launched a core buy-to-let (BTL) range. It secured an additional £1bn in funding last year to meet rising demand for specialist property finance, and, at the start of this year, made 26 promotions across its team.
Since its launch, Market Financial Solutions has managed more than £1.2bn in lending and its loan book has peaked at £2.4bn.
Paresh Raja (pictured), founder of Market Financial Solutions Limited, said: “This is an extremely difficult moment for everyone connected with Market Financial Solutions. As a family-founded business that has been built over nearly 20 years, this is not a decision that has been taken lightly.
“The current situation does not reflect a failure of the underlying business or the quality of our assets, but rather a technical and procedural impasse that has temporarily limited our access to everyday banking facilities.”
He added: “My priority is, and always has been, the people behind this business – our staff, our investors and our creditors. Entering administration allows the company to be protected while we work openly and cooperatively with the joint administrators to find a way forward.
“I remain fully committed to preserving value and doing everything possible to support a positive outcome for all stakeholders.”
The BDLA is ‘encouraged’ by the lender’s proactive approach
The Bridging & Development Lenders Association (BDLA) issued a statement to say it acknowledged the “difficult situation” the management, staff and clients of Market Financial Solutions were facing, and said it understood that the decision was taken as a protective measure.
Adam Tyler, CEO of the BDLA, said: “Our immediate thoughts are with the team at Market Financial Solutions, as well as the many brokers and borrowers who have built long-standing relationships with the firm over nearly two decades.
“Market Financial Solutions has been a prominent and active participant in our sector, and we are encouraged by the management team’s proactive steps to seek a structured environment through administration to protect the business’s assets and ensure the continuity of loan management and servicing.”
Tyler added: “The specialist lending sector remains robust, well-capitalised, and continues to provide vital liquidity to the UK property market. While any instance of a lender entering administration is significant, it is important to distinguish between a systemic industry issue and a specific operational challenge.”
The BDLA said it would continue to monitor the situation.
