Business First September 2017 Business First September 2017 - Page 21

cases significantly greater) than the value of its assets. This made raising finance to exit this position very challenging for the borrower, but it was also, understandably, a difficult proposition for any bank in Northern Ireland to lend into. This created some space for the alternative lenders to emerge where those lenders had an appetite for high leverage lending, and where the borrower needed a high loan­to­value ratio. The terms, of course, reflect the risk but the utilisation of these alternative lenders to re­finance real estate finance loans from some of the loan portfolio purchasers was a vital step in a recovering market. In fact, without the availability of the alternative lending between 2014 and 2017, the transactional activity in local property and finance markets would have been significantly reduced. The future There has been an important role for the alternative lenders to play in Northern Ireland in asset based lending and, since 2014, in complex real estate financings. While it is difficult to envisage a market in which alternative lenders replace banks locally, there is no reason why they cannot co­exist, in the foreseeable future at least. MOREINFORMATION The Finance Team at Arthur Cox is well positioned to advise businesses on the impact of emerging trends in the sector and on any aspect of banking and finance law in Northern Ireland. Call +44 28 9023 0007 for further information from Kieran or Stuart, or your regular Arthur Cox contact. 19