The service that we offer to our syndicate company participants includes the entire management of their loan portfolio from start to finish.
We are responsible for sourcing applications, processing applications, taking up all necessary references and instructing our Chartered Surveyors’ valuation of the property security. In this process, we will, where possible, obtain confirmation that the borrower is capable of fulfilling his commitments to the loan, prior to it being granted. If appropriate, we will retain sufficient funds from the loan to cover the monthly interest payments for the envisaged period of the loan.
We are also responsible for instructing solicitors to perfect the property security, and our solicitors normally hold the mortgage documents and deeds to our order for the duration of the loan.
Post drawdown, we monitor all of the loans on a day-to-day basis to ensure that repayments are kept up-to-date, taking such action as we consider is appropriate for the circumstances.
Interest on the loans is payable monthly in arrears. We aim to account to your company for your share of the interest within four weeks of it being received by us. Whilst we use our best endeavours to ensure that the borrowers pay the interest on time, this cannot of course be guaranteed.
For development loans, we often provide our borrowers with the option to “roll up” the interest, adding it to the loan on a monthly basis. Under such circumstances, your company would not receive the interest until the loan is repaid.
On redemption of the loan, we are responsible for allocating to each syndicate participant its respective share in the loan, together with any outstanding unpaid interest.
We are very careful to ensure that each syndicate participant spreads its participation over a number of loans in order to minimise risk. In addition, each loan is spread amongst a number of syndicate participants. A loan of £100,000, for example, may well have five syndicate participants involved.
We sometimes charge fees on individual loan transactions, but these do not form part of the remuneration available to syndicate participants. In many cases these fees are to cover introductory commissions to finance brokers and other introducers, but this is not always the case.
Annually, each syndicate participant is responsible for it’s own audit. However, in order to keep the audit fees to a minimum, we arrange for the syndicate participants’ records to be fully written up to trial balance stage, before the audit is carried out.