Atom bank recently completed our largest ever commercial mortgage. It’s a £9.95m facility for VOCO Leicester Hotel, arranged by specialist originator Assetz Capital, who we recently partnered with.
The property is a fantastic hotel, which is being reflagged and upgraded by the hotel management company Kew Green Hotels, an exciting project to be a part of. It’s the latest significant milestone achieved by Atom bank recently, having passed the £1bn commercial lending mark earlier this year.
Setting records in this way is undoubtedly important, and very satisfying as we grow as a business.
However, they are also an excellent indicator of our ongoing appetite to go further in providing badly-needed support for British businesses.
After all, what’s been clear from our regular Pulse surveys of commercial mortgage brokers is that demand for external funding from businesses is on the rise.
As the economy continues to settle and hopefully grow, that’s only likely to increase further, and businesses will need to have the support of lenders who understand what matters to them.
Speed matters
One of the aspects of this case which both Assetz Capital and the client were thrilled about was the speed at which we were able to get the deal over the line. We managed to move from the initial discussion to completion in less than 12 weeks, an incredibly quick turnaround for any sort of commercial case.
It’s often overlooked just how important speed is when it comes to commercial lending. Yet the truth is that when deals drag on and avoidable delays occur, it can put the whole project at risk.
In my experience, commercial borrowers absolutely value being able to access that funding as quickly as possible, so they can move on to the next stage of the project.
Speed is a preoccupation of ours at Atom bank, and has driven a succession of changes we have made over the last year to ensure that we are able to turnaround cases as quickly as possible.
Working closely with brokers has allowed us to pinpoint the pressure points where progress can stall, as well as how to get past them quickly.
We’ve also been able to refine our decision-making processes, with the result that brokers and their clients know where they stand much faster.
The results have been clear for all to see, with the time between application to Agreement in Principle (AIP) reduced by 94% on average, while the application to offer time has been cut by 61% to an average below 10 working days.
As well as our competitive rates and flexible criteria, it’s precisely because brokers know that we can deliver an answer quickly that so many are opting to use us for their commercial clients.
The power of partnerships
The VOCO Leicester Hotel deal is just the latest in a series of cases Atom bank has worked on with Assetz recently.
In the past few months we have worked together on deals involving office investments, leisure assets and now a hotel. It’s an excellent demonstration of the value of working closely with trusted partners, who understand what your clients are looking to achieve.
That trust doesn’t happen overnight – lenders need to prove themselves each time, establishing why they are able to deliver for the client.
With this case, there was also the need to reshape the deal on a couple of occasions, to ensure that challenges were overcome and we could get to a successful conclusion.
That won’t happen with all lenders, but Atom bank has become known for our flexibility, finding creative ways to build a deal that works for everyone.
Records are made to be broken
Securing our largest ever commercial loan is a tremendous moment, but it also sets the bar for our future activity.
This isn’t a one-off – Atom bank actively wants to bring our fast and transparent service to a greater number of large loans, alongside our existing work with smaller borrowers.
The commercial market is one crying out for innovation from lenders, and we are already seeing terrific results from the improvements we have made. They are just as important to businesses looking to borrow £10m as those searching for more modest sums.
The task now is to strengthen those relationships with a wider range of commercial brokers, and ensure that even more businesses benefit from the Atom bank approach.
David Castling is head of intermediary distribution at Atom bank
