Loan Introducer catches up with Michael Strange of Funding 365 to find out what makes him and the lender tick
Can you explain your role at Funding 365?
I am the founder and Managing Director of Funding 365. My day to day activities are pretty widespread although a large portion of my time is spent working with our underwriting team to craft tailored solutions for borrowers who are presented with a complex funding issue.
How did you get involved in bridging finance?
My entire career has been spent in investment banking or in hedge funds where, one way or another, I was looking after funding solutions for mortgage companies, credit card issuers, auto loan and consumer loan providers. Prior to setting up Funding 365 I set up a company called Chrysalis Capital which focused on providing invoice financing, unsecured debt, secured debt and equity financing to small UK companies. The secured element of this was, effectively, bridging finance. This side of Chrysalis Capital grew so quickly that it became clear that we should focus almost exclusively on bridging – and hence set up Funding 365.
How does Funding 365 aim to be different from its competitors?
Our objectives focus on providing interest rates that are at the cutting edge of the market and provide customer service that is second to none. The one area where we do not want to compromise is on the clarity or transparency of our products. To date we have had no customer complaints at all – we put this down to a fair product offering with no hidden small print, fair treatment of our customers and, critically, underwriting the loan upfront in a manner where we are confident that the borrower can easily achieve his targeted exit.
You hired a new underwriter earlier this year and a new BDM in late 2015, do you have further plans to grow the team this year?
We try not to be too prescriptive about headcount as really, hiring the right people is a more important decision than the number of people that you hire. Our team is currently 10 strong. We are growing steadily and will continue to add headcount throughout the year as circumstances dictate.
How has the bridging market changed since Funding 365 was created in 2013?
We have seen huge improvements in the product offering to borrowers – longer term loans, cheaper rates, more aggressive development loans and significantly larger loan sizes being completed. At the same time, the lender community has become much more sophisticated and professional which will, in due course, improve the perception of the bridging market.
What challenges do you think lie ahead for the industry?
Most people would probably say regulation which, although it will be a challenge, seems to be a generally beneficial step forward in my view. I think that the biggest challenge ahead is a significant slow down and price deterioration in the London and South Eastern housing market. I have been saying this for a while now, but frankly, remain more convinced than ever that a marked deterioration is on the way. Any bridging lenders who have completed aggressive development loans or LTVs at 75% (or higher) are going to be facing a real challenge should this market softening occur.