Miranda Khadr

An interview with Miranda Khadr: 'There still aren't that many options for developers who want longer-term products'

Yellow Stone Finance launched eight months ago to provide specialist advice to clients who want a range of funding.


In an interview with Development Finance Today, Miranda Khadr, founder of Yellow Stone Finance (pictured above), highlights the progress of the company and the upcoming launch of Pitch 4 Finance.

Eight months on from the launch of Yellow Stone Finance, what has the progress been like?

It’s been very busy, especially when you consider the wider political and economic uncertainty in which we launched the business. We’ve worked on a lot of very interesting cases, from an equity investment into a business through to the conversion of a care home into apartments, and we have been instrumental in saving some deals as well — it’s been a good variety.

We also launched our referral service earlier in the year and have received a good volume of referrals from brokers as well as enquiries direct from clients.

Specialist knowledge and personal relationships are a key element of successfully placing deals in our market. So, for brokers who may not have those relationships, the referral service enables them to leverage our expertise and experience to find the right solution for their clients.

What trends are you seeing in the specialist finance market?

There is a lot of funding looking for a home at the moment and this competitive lender environment means there are great deals available, even for clients with relatively complex circumstances. The key to achieving these rates is working with a broker that has expertise and experience in specialist finance and strong relationships with lenders, and this is one of the factors behind the success of our referral service.

Brokers who are less experienced in this market may be able to place a deal, but how do they know they are securing their clients the best deal? It’s often a good idea to partner with an expert to ensure the best possible client outcome — and this is particularly true in the current market.

With the launch of Pitch 4 Finance looming, how do you think it will revolutionise the way new funding is accessed?

As well as Yellow Stone Finance, we have also been kept very busy with the ongoing development of Pitch 4 Finance, working hard with the developers to ensure the platform delivers the best possible experience. Pitch 4 Finance will provide borrowers and brokers with the opportunity to submit their loan request to multiple lenders in one place, scanning the market to match their circumstances with lender criteria.

Matching lenders are then able to pitch for the loan, sending details of the terms they can offer direct to the borrower through the platform.

We believe it’s the first business and commercial finance lending platform to meet the needs of both the lender and the borrower, combining technology and individual underwriting to give both greater control of finance applications. 

With multiple lenders pitching for their business, borrowers have the opportunity to access cheaper funding underwritten for their specific circumstances. At the same time, lenders are able to control their appetite for business through the platform and can maintain a hands-on approach to underwriting.

Which areas of the property development market do you believe are underserved and why?

The property market is moving very slowly at the moment, which provides a challenge for developers and we are seeing growing demand for development exit loans for longer terms of two and sometimes three years. There still aren’t that many options for developers who want longer-term products.

What will be the biggest challenges for the development finance market this year?

Developers are currently facing an unwelcome combination of softening prices and weakening demand and many developments are now coming to an end potentially 15–20% down on their anticipated GDV. For example, a lender may have lent £7m on a GDV of £10m and now that the development is completed, it’s coming in at £8m and struggling to sell units.

This can be a very difficult situation for developers who have a development loan coming up for redemption, are struggling to sell the completed properties and whose development value has decreased since they first started the project.

Even with the best will in the world, brokers have limited options. There is a lack of options for commercial term products to help borrowers exit short-term development loans and sometimes the numbers just don’t stack up for a straightforward refinance.

But, with a little creativity from a broker with strong relationships and expertise, there are often ways that a solution can be found.

For developers who are beginning a new scheme, there are still opportunities to make good returns on developments, but a well-planned exit is key.

If the only strategy you have for your scheme is to sell the units, then you could come unstuck and you might even struggle to refinance if you are high leveraged and suffer a down valuation.

In this climate, I would always look at the potential for buy-to-let as an exit, as it will provide you with more options and the lender with more comfort that there is a viable route for the scheme. The market is tough at the moment and it is always better to have a plan B. 

How did you get into the industry? 

I worked for a couple of individuals who worked in a large FTSE wealth management business while I was at university. I then spent 10 years there, although most of my clients were debt-centric and I decided to concentrate on debt sourcing rather than other areas of investment advice. Having worked in wealth management, this gave me a much broader understanding of overall areas of consideration and taxation matters than if I just had a debt advisory background.

If you weren’t in the industry, what would you be doing? 

I’m not really sure. Something to do with problem solving I imagine.

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