How does communication with brokers enhance efficiency in processing cases?
Nick Damon, senior underwriter at LHV Bank: We prioritise clarity and constructive feedback, ensuring engagement throughout the credit process. For example, a deal involving a 17th-century castle converted into a hotel required us to analyse forecasted profitability. We recommended amendments to the deal structure, including lower covenant levels, which ultimately satisfied the broker.
Peter Buckley, senior underwriter at LHV Bank: LHV’s active presence in the financial press, led by Conor McDermott, helps us establish market credibility. This proactive approach extends across our lending team, ensuring swift case progression and completion.
David Leigh, senior underwriter at LHV Bank: Having experience in business development and restructuring, I leverage relationships with brokers to facilitate smoother transactions. A recent case involved acquiring a vacant industrial unit, where early engagement with valuers and solicitors enabled completion within three weeks. Effective communication throughout the process ensured a seamless transaction, demonstrating the importance of fostering strong broker relationships.
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What’s the most interesting case you’ve underwritten recently?
Nick Damon: I worked on a £14.9m transaction refinancing a group of care homes, which included acquiring two additional properties. Due diligence was crucial to assess past regulatory issues, requiring detailed cash flow analysis and a balance between security and customer flexibility. The complexity of the case demanded extensive underwriting expertise and an in-depth understanding of the industry’s operational challenges.
Peter Buckley: Two cases stand out: a refinance for three Merseyside golf courses expanding their facilities and a refinance of five North West quarries, some repurposed for waste storage from a major engineering project. Both deals required close collaboration with various stakeholders to ensure all aspects of risk were considered and mitigated effectively.
David Leigh: A fire-damaged unit purchase required a creative approach. The approval relied on the business owner’s expertise and a strong personal guarantee. The client later secured a lease for open storage, creating a steady income stream. This case illustrated how a flexible underwriting approach could transform a seemingly high-risk asset into a viable investment.
What can brokers do to facilitate faster approvals?
Nick Damon: Brokers generally provide key details upfront, but deeper insight into trading balance sheets and management costs in commercial property deals would enhance assessments. Ensuring all financial information is comprehensive and well-structured allows underwriters to evaluate deals more efficiently.
Peter Buckley: Conducting background checks on clients, including adverse media searches, could help pre-empt underwriting concerns. Identifying potential issues early can save time and prevent complications later in the process, enabling a smoother approval experience.
David Leigh: Submitting complete documentation from the outset and conducting Google searches to establish if there are any adverse media articles where we’re likely to seek further information for additional comfort can prevent delays and streamline approvals. Having a well-packaged proposal minimises back-and-forth communication, ensuring underwriters can focus on key risk areas from the start.
What types of cases are the most challenging and why?
Nick Damon: Forecast-led transactions are often complex, requiring stress testing of assumptions to ensure viability. Restructuring loans based on realistic projections is sometimes necessary. These cases demand a detailed understanding of market conditions and financial trends to accurately assess risk.
Peter Buckley: Cases with unusual nominee or offshore structures take time to assess. Collaboration within the underwriting team helps ensure thorough due diligence. Engaging legal and compliance teams early in the process can help navigate regulatory complexities more efficiently.
David Leigh: Challenges can often arise for self-employed applicants with inconsistent income or entirely forecast-led proposals. Cases involving complex nominee structures in different jurisdictions also demand deeper risk assessment. A detailed review of financial history and future income projections is essential to mitigate potential risks effectively.
How does LHV Bank’s strategic approach benefit brokers in a competitive market?
Nick Damon: In one case, we secured a multi-unit freehold block deal by restructuring the loan when a competitor offered a lower interest rate. Adjusting the LTV slightly allowed us to win the deal while maintaining an acceptable risk level. This flexibility in structuring deals helps brokers provide better solutions for their clients.
Peter Buckley: Speed is key. A retail park case in the South East moved from underwriting to completion in just eight days, thanks to early coordination with valuers, solicitors, and lending operations. Efficient internal processes enable LHV Bank to support brokers in securing competitive deals quickly.
David Leigh: LHV Bank’s flexibility and collaborative approach helps brokers secure competitive deals. A recent case involving a partially vacant office building required structuring additional security, later released upon milestone completion. This tailored solution strengthened our client relationship, leading to repeat business. By maintaining a proactive underwriting strategy, we continue to support brokers with bespoke, timely funding solutions. This approach ensures they can navigate the lending landscape with confidence and efficiency.
