Business First September 2017 Business First September 2017 | Page 21

cases significantly greater) than the value
of its assets.
This made raising finance to exit this
position very challenging for the borrower,
but it was also, understandably, a difficult
proposition for any bank in Northern
Ireland to lend into.
This created some space for the
alternative lenders to emerge where those
lenders had an appetite for high leverage
lending, and where the borrower needed a
high loan­to­value ratio.
The terms, of course, reflect the risk but
the utilisation of these alternative lenders
to re­finance real estate finance loans from
some of the loan portfolio purchasers was
a vital step in a recovering market.
In fact, without the availability of the
alternative lending between 2014 and
2017, the transactional activity in local
property and finance markets would have
been significantly reduced.
The future
There has been an important role for the
alternative lenders to play in Northern
Ireland in asset based lending and, since
2014, in complex real estate financings.
While it is difficult to envisage a market
in which alternative lenders replace banks
locally, there is no reason why they cannot
co­exist, in the foreseeable future at least.
MOREINFORMATION
The Finance Team at Arthur Cox is
well positioned to advise
businesses on the impact of
emerging trends in the sector and
on any aspect of banking and
finance law in Northern Ireland.
Call [phone] for further
information from Kieran or Stuart,
or your regular Arthur Cox contact.
www.businessfirstonline.co.uk
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