‘It’s best to be open and honest’

Q&A with Natalie Smethurst, underwriting manager at Seneca

In the application process for bridging finance, dealing with complex loans and analysing risk for both the borrower and lender in a time-sensitive situation takes someone with a lot of experience.

Here’s our Q&A session with Seneca’s underwriting manager, Natalie Smethurst, to help you get an insight into how she assesses loans and to hear some tips for submitting bridging finance requests.

So Natalie, what’s your job and how long have you done it for?
I’ve worked in the property finance team at Seneca for three years. I protect the security of Seneca Bridging and its investors. We’ve completed circa 300 loans to a value of £75m.
Before joining Seneca, I worked at Manchester Building Society and Northern Rock in underwriting roles.

What makes your service stand out from others who also offer competitive bridging and development finance?
Our speed of response. It’s not unusual for us to respond with indicative terms within an hour of receiving the enquiry, and for us to instruct solicitors and valuers on the same day.

What steps should a property developer take before applying for bridging or development finance?
They should ensure they have full command of the numbers: purchase price, build costs, professional fees, GDV, exit strategy etc as this is the starting point for any assessment of any new loan application.

What does the underwriting process involve?
The relationship team receive an enquiry and they pass this over to me for an initial review, comment and pricing.
The relationship team will liaise with the broker/borrower and advise them on indicative terms. If they are happy with this, the underwriting team will issue formal heads of terms. On receipt of signed terms and a completed application form, I will fully underwrite the loan. I’ll then proceed to instruct valuation & legals, and my team will manage the loan through to completion.

How long does underwriting take?
The initial assessment will be done the same day as this will allow us to produce indicative terms. We don’t take a scattergun approach and produce indicative terms for every enquiry we receive – we only produce terms on deals that we want to lend on.

After the signed heads of terms and application form is sent back to us, we endeavour to fully underwrite the case within 24 hours.

There are usually other associated fees, such as costs for lawyers and valuers. How do you manage this?
We always try to negotiate the best deal for the borrower.

We know that no two cases are the same, so it may mean that we have to shop around to find the right deal at the right price, rather than just using the same lawyer or valuer on every case.

How do you deal with requests for bridging loans that include both commercial and residential property?
Essentially, the underlying credit approval process is the same for both, however, with a commercial property, we will have to undertake a little more due diligence. This includes considering factors such as leases, refinance options and local demand.

I have significant experience of both residential and commercial bridging so it is highly unlikely that I will come across something that I haven’t seen before.

What sort of problems can a developer face along the way?
Most developments go relatively smoothly, but ground-up developments are different and can make the most experienced property developer nervous.

If a build falls behind schedule, this can mean that build costs can be greater than originally accounted for. As a result, contractors may not turn up, building material deliveries may be overdue (or not arrive at all). Planning issues may be overlooked and other unforeseen site issues may arise.

It really is a minefield and not for the faint-hearted!

What advice would you give to developers or introducers applying for a loan?
Tell us everything you know.

As mentioned previously, there is unlikely to be a situation that I have not come across before. It’s best that anyone introducing business to us is open and honest so I can deal with any potential issues upfront.