The cost of regulation has significantly increased, as have the layers of bureaucracy to approve a loan and the appetite for property lending to SMEs has diminished.

There is also often a mismatch between the mandates of the front-line business development managers and multi layered internal credit risk teams, which means final credit approved terms are materially different from the terms first offered, causing delay, uncertainty and frustration to the borrower.

Enter the non-bank lenders who have deservedly earned a reputation for their nimble response times.

However, the influx of new non-bank lenders also brings challenges, particularly in terms of experience and robustness.

The natural consequence of so many new lenders is competition for talent — and experienced talent at that.

The less experienced, the less likely that individual has an ability to make real decisions or to understand the requirements of developers and the challenges of developments, which is wisdom that builds up over time.

Development finance is not a commoditized product, though many have tried to make it one.

Similarly, if you are a broker or developer choosing a lender, certainty of funding is key.

We advocate that you look closely at how long they have been operating and the financial robustness that sits behind them.

•   The Finance Professional Show 2023: The Video
•   Bidwells secures £10m sale of 20-acre Birmingham industrial site to John Pye Auctions
•   Signature Property Finance hits £81.8m of originations in 2023

The unfortunate result of so many lenders is not all of them can have the same level of funding and financial soundness.

Too often have we heard of lenders retracting from deals at a late stage due to a change in liquidity or acting in an unreasonable manner during or at the end of a loan term to desperately get capital back. 

At Downing, we have worked hard to find a depth of experience amongst the origination team that allows us to place decision making ability in them.

With a combined industry experience of 111 years and an average of nearly 28 years in property finance per person, their understanding of development is one of the best in the industry allowing them to deliver on what they will say they will do.

Naturally some things with the deal structure may change as a result of the diligence process, but other than that we can confidently say that our final terms across the 150+ schemes we have funded over the last few years tally very closely with initial terms offered. 

Those same people are then the point of contact from cradle to grave of the loan helping developers to navigate challenges, advance funds and successfully complete their projects. 

In summary, selecting a development finance lender carries significant implications for a project's trajectory.

A well-considered choice based on experience, quick decision making and trading history lays the groundwork for growth rather than uncertainty.