It kick-started this by hiring James Bloom, who joined as divisional director from Masthaven at the end of last year.
Bloom told Specialist Lending Solutions about the firm’s growth plans which included increasing its development finance business and potentially adding a regulated self-build product.
“We’d like to try to double our loan book in next two or three years, which admittedly lots of people are trying to do as well,” Bloom said.
“But we’re not looking to expand recklessly, we’re not going to go up the risk curve, we are not looking to be the biggest volume player.
“We want to get a good size book and do a good chunk of business, but want to do what fits us.”
Instead Bloom is looking to build on a service-based proposition, educating brokers about the right type of deals ABC will consider, and expanding outside its core bridging market.
Eyeing development deals
“Development finance is something I’ve always had an interest in and done, so we’ve got an appetite in that area and a good idea to get into it more,” Bloom said.
“Bridging is always the biggest part of the market for us, but we believe we can push our development finance business up to 30 per cent of our book from around 20 per cent.
“And we can look more in the regulated space, perhaps regulated self-build mortgages. We’re going to look at all our products,” he added.
“It’s our job to make that education point for brokers to know what an ABC deal is – commercial deals, larger deals, more complicated deals.
“It’s about the market understanding where they can use us, and us explaining it,” he added.
Bloom intends to spend a large part of this year getting out to brokers to spread this message and has already made a start since joining the lender.
Another focus has been introducing a concierge-style service for key brokers, where he is available throughout the deal for queries and to tackle underwriting issues – and the hope is to expand this.
“We’re trying to do something a bit differently where I will see the underwriter and sort issues out,” he said.
“We’d like to extend that, we’ve done it to make sure its scalable and also because there’s only one of me.”
‘Some deals make me wince’
While Bloom is pledging ABC will remain careful in its growth, he believes the sector has become “such a heated market” with the potential for more lenders to fall by the wayside.
“I think it has gone too far up the risk curve. If someone wants to lend 80-85 per cent loan to value (LTV) and it’s a closed deal then that maybe fine, it’s up to them,” he said.
“But we believe 70 per cent is an acceptable level. We do look at what others do and wince a little bit, but that’s not for us to say.
“And having been through a couple of downturns I do look at some products and think they are a little bit racey. We have got zero tolerance to losses, but that’s not for everyone.”
The current market is particularly difficult for new entrants, where the only way to gain traction is by going up the risk curve or offering higher LTVs.
“It’s difficult because they can get a £20-£30m book but not get the scale,” Bloom noted.
And that becomes particularly relevant if, as he suspects, regulators are taking a harder look at smaller firms.
“I think the Prudential Regulation Authority (PRA) is going to get tougher with smaller banks to make sure they are robust enough to withstand their risks,” he concluded.